Cashfree waives gateway fees on first ₹20 lakh GMV to target 2 million SMB merchants
Cashfree Payments will charge new Indian merchants zero gateway fees on their first ₹20 lakh in GMV through FY27, using the festive-selling period to accelerate SMB onboarding. The Bengaluru fintech aims to double its SMB merchant base from 1 million to 2 million.
What happened
Cashfree Payments will waive gateway fees on the first Rs 20 lakh GMV for new Indian merchants through FY27, targeting festive-season SMB acquisition. The
Key facts
- Zero payment gateway fees for new merchants
- Fee waiver covers first Rs 20 lakh in GMV through FY27
- Target: double SMB merchant count to 2 million by FY27
- Current SMB merchant base: 1 million
- Around 25,000 new companies are set up monthly; about 20% sign up with Cashfree
- Average SMB/D2C business makes 40% of annual sales during festive season
- 90% of new festive-season sellers record Rs 20 lakh GMV
- Planned funding round of over $100 million in FY27
Why this matters
Cashfree’s push toward 2 million SMB merchants strengthens its distribution footprint and could make adjacent products such as lending, payouts, and merchant software more attractive partnership or acquisition targets.
What to watch
- Monthly net new active merchants, not merely registered merchants, and progress toward the 2 million SMB target.
- GMV per newly acquired merchant, share crossing the ₹20 lakh threshold, and retention 3, 6, and 12 months after the waiver is exhausted.
- Blended payment take rate, customer-acquisition cost, support cost, fraud losses, and contribution margin for the promotional cohort.
- Competitor fee-waiver announcements, MDR discounts, device bundles, or bank/acquirer partnership offers during the festive period.
- Adoption of higher-margin products such as payouts, payment links, subscriptions, international payments, verification, and reconciliation.
- RBI, NPCI, or banking-partner changes affecting payment aggregation compliance, UPI monetization, settlement rules, or merchant-risk controls.
- Bundle the fee waiver with rapid KYC, assisted onboarding, payment links, WooCommerce/Shopify integrations, and regional-language merchant support to convert festive sellers quickly.
- Use transaction behavior during the free-GMV period to segment merchants for post-threshold pricing, payout products, subscriptions, lending referrals, and reconciliation software.
- Offer retention incentives based on volume consistency and product adoption rather than extending blanket zero pricing beyond the ₹20 lakh threshold.
- Increase underwriting, fraud monitoring, reserve policies, and merchant-risk reviews as onboarding broadens into newer and smaller sellers.
- Target verticals with repeat digital collections and higher service attach potential, including D2C brands, social-commerce sellers, education, travel, clinics, and local services.