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A single gateway settlement mixes UPI, card, net-banking and wallet payments, each with a different fee, so the deduction cannot be checked against one rate.
Split the settlement report by payment mode, apply the agreed rate for each mode, add 18 percent GST on the fees and compare the result with the deductions taken.
Keep a rate card per payment mode from the gateway agreement and export the settlement report with the payment-method column every day.
Each mode's fee line is checked against its agreed rate and the combined deduction ties exactly to the gross minus the bank credit.
UPI, credit and debit cards, net banking and wallets usually all end in one combined gateway settlement. But each mode moves money differently, carries its own reference number, is charged its own way and refunds its own way. So one bank credit can hide three or four separate fee lines.
How does each payment mode move and settle?
| Mode | How the customer’s money moves | Reference you see in the report | How the fee is usually charged | How a refund returns |
|---|---|---|---|---|
| UPI | Customer’s bank to the gateway’s escrow account through NPCI, in seconds | 12-digit UPI reference (RRN) plus gateway payment ID | Regulated by NPCI and government policy; gateways may add a platform fee | To the customer’s bank account, via UPI |
| Credit or debit card | Card issuer to acquiring bank through the card network, then to escrow | Gateway payment ID, authorisation code; ARN for refunds | Percentage of the amount; often higher for credit, international and corporate cards | Back to the same card |
| Net banking | Customer’s bank to the gateway’s account under a bank tie-up | Gateway payment ID and the bank’s transaction reference | Percentage or flat fee per transaction, per your agreement | Back to the paying bank account |
| Wallet | Wallet balance to the gateway | Gateway payment ID and the wallet’s transaction ID | Percentage, per your agreement | Back to the wallet |
All of these then follow the same last step: the gateway combines captured payments and settles to your bank on your cycle, often T+1 or T+2.
Why does the fee on my settlement differ from one payment mode to the next?
Because each mode has a different chain of parties to pay. A card payment involves the card-issuing bank, the card network (Visa, Mastercard, RuPay) and the acquiring bank. Net banking involves an arrangement with each bank. UPI charges for merchants are shaped by NPCI and government policy. Bank-account UPI payments to merchants have carried no merchant discount rate under current rules, but NPCI has approved new charges on larger P2M payments that apply once the new charges start; NPCI has postponed the start to after Diwali 2026.
The rate for each mode is written in your gateway agreement. GST at 18 percent is then added on every fee.
Worked example: ₹1,00,000 of sales in one settlement
A home-décor shop’s sales on 9 October, with illustrative rates (not any gateway’s actual price):
| Mode | Sales | Illustrative fee rate | Fee |
|---|---|---|---|
| UPI | ₹60,000 | 0 percent | ₹0 |
| Cards | ₹30,000 | 2 percent | ₹600 |
| Net banking | ₹10,000 | 1.8 percent | ₹180 |
| Total | ₹1,00,000 | ₹780 |
GST at 18 percent on ₹780 = ₹140.40.
Settlement = ₹1,00,000 − ₹780 − ₹140.40 = ₹99,079.60.
One bank line of ₹99,079.60 arrives on 10 October. To check it you need the report’s payment-method column, because a single blended rate (0.92 percent including GST) tells you nothing about whether each mode was charged correctly. If cards had been charged 2.5 percent instead, the fee would be ₹750, and the gap of ₹150 plus ₹27 GST would vanish into the total.
Do refunds go back the way the customer paid?
Yes, as a rule. The gateway sends the refund back on the same rail. The timing differs: UPI refunds often reach the customer quickly, while card refunds can take several working days to show on the card statement. For you, the refund usually comes off a later settlement, not as a separate bank debit.
One extra point: whether the original fee is returned to you on a refund depends on your agreement. Check it.
What should I keep from each day’s report?
- Payment method for every row.
- Gross amount, fee and GST for every row.
- The settlement ID that groups the rows.
- Refund rows, with the original payment ID.
What to read next
- Next in this series: what does T+1 settlement mean?
- Checking each mode’s fee against the agreed rate: MDR fee reconciliation
- Terms in settlement reports: platform settlement glossary
- When matching becomes daily work: payment gateway reconciliation
Payment-gateway settlement reconciliation is on the TransactIG roadmap.