The 2% Commission Tax on Small Merchants
Standard payment aggregators in India routinely deduct 2% plus 18% GST on every single customer transaction, while holding merchant funds for days before settlement. For small businesses, digital creators, and indie developers operating on lean margins, this fee eats directly into operational profits.
PhonePey (UPIGateway.dev) was built to eliminate third-party commission deductions. By leveraging standard NPCI UPI protocols, payments travel straight from your customer’s UPI app directly into your personal or current bank account.
Our system handles the technical orchestration: creating dynamic QR codes with exact order amounts and unique transaction notes, inspecting automated bank confirmation notifications, and triggering instant webhook callbacks to mark orders as paid in your database.
Three Simple Steps to Zero-Commission Payments
Generate Dynamic NPCI QR Code
Your server calls our REST API with the order ID and amount. PhonePey responds with an NPCI-compliant dynamic QR code and universal UPI intent link.
Customer Scans and Pays Directly
The buyer scans the QR code with any UPI app (GPay, PhonePe, Paytm, BHIM, Cred). Funds settle directly into your bank account with 0% deducted.
Instant Automated Webhook Verification
Our reconciliation engine captures the bank settlement confirmation and dispatches an authenticated HTTP POST webhook to your server.
Core Technical Capabilities
0% Gateway Transaction Commission
Keep 100% of your earnings. Never sacrifice 2% or more to payment gateway intermediaries.
Instant Direct-to-Bank Settlement
Funds settle in seconds directly into your designated bank account without multi-day settlement holding periods.
Automated IMAP & UTR Capture
Universal IMAP transaction parsing monitors your notification inbox to reconcile bank reference (UTR) numbers automatically.
Works with All Major Indian Banks
Compatible with SBI, HDFC, ICICI, Axis, PNB, Canara, and all UPI-enabled financial institutions across India.
Technical Specifications & Latency Parameters
| Commission Fee | 0% Direct Settlement |
| Settlement Speed | Instant (Real-Time NPCI Direct Transfer) |
| Supported Protocols | Dynamic QR Code, Intent URL, UTR Verification |
| Bank Compatibility | All 150+ NPCI UPI Member Banks |
| Webhook Latency | < 2.5 seconds from bank confirmation |
Production Code Snippets
curl -X POST https://phonepey.lushai.dev/api/v1/order/create \
-H "Authorization: Bearer YOUR_MERCHANT_KEY" \
-H "Content-Type: application/json" \
-d '{
"order_id": "ORD-99281",
"amount": 499.00,
"customer_mobile": "9876543210",
"callback_url": "https://yourdomain.com/api/payment-webhook"
}'app.post('/api/payment-webhook', (req, res) => {
const { order_id, amount, utr, status } = req.body;
if (status === 'SUCCESS') {
// Fulfill customer order in database
console.log(`Order ${order_id} verified with UTR: ${utr}`);
}
res.json({ received: true });
});<?php
$rawInput = file_get_contents('php://input');
$data = json_decode($rawInput, true);
if ($data && $data['status'] === 'SUCCESS') {
$orderId = $data['order_id'];
$utr = $data['utr'];
// Update order status in your MySQL database
// Database::updateOrderStatus($orderId, 'paid', $utr);
}
header('Content-Type: application/json');
echo json_encode(['success' => true]);Production Implementation Insights
Include Dynamic Reference Notes
Pass the unique order reference in the transaction note so your customer sees the exact order invoice number in their UPI banking passbook.
Set Up Fallback UTR Entry
Provide a clean manual UTR input field on your checkout page so customers can verify payments instantly even if their mobile network is slow.
Frequently Asked Questions & Integration Details
Does PhonePey hold customer funds in escrow?
No. PhonePey operates as a non-custodial technical reconciliation layer. Funds transfer directly from the customer’s bank account to your merchant bank account.
Which UPI applications can my customers use to pay?
Any UPI-compliant app in India: Google Pay, PhonePe, Paytm, BHIM, Cred, Amazon Pay, and individual bank UPI applications.
Is KYC required to set up PhonePey?
You only need an active Indian bank account with any functional UPI VPA (for example, merchant@upi or yourname@okaxis). No lengthy merchant documentation is required.
How fast do webhook callbacks arrive after a customer pays?
Webhooks typically arrive within 2 to 5 seconds of the customer completing the payment in their UPI app.