78% of Indian businesses would switch payment gateways for AI capabilities: Zoho survey

About 78% of Indian businesses would switch their primary payment gateway if another provider offered the AI capabilities they expect, according to Zoho’s Indian Merchant Payment Survey 2026.

The survey, which covered more than 700 businesses ranging from micro and small businesses to large enterprises, found that nearly 60% are already using AI capabilities in payment operations, while another 20% are evaluating them.

Fraud detection was the most sought-after AI capability, followed by smart payment routing and automated reconciliation. Businesses also cited risk assessment, chargeback and dispute settlement, and customer insights among the AI features they expect from payment providers.

Payment failures and reconciliation remain significant operational challenges. About 56% of respondents identified payment failures as a major issue, while 46% cited reconciliation. The survey found that 61% of businesses spend between one and three hours a day on reconciliation, while nearly 20% spend three to six hours.

Integration with accounting, billing and ERP systems was cited by 65% of businesses as a key reason for staying with their current payment gateway. Among reasons for switching providers, same-day settlement ranked highest, followed by lower fees and merchant discount rates, and improved reconciliation and payment insights.

About 83% of respondents said they would be willing to pay a fee for guaranteed same-day settlement.

Among businesses that had experienced payment fraud, UPI social engineering scams were the most commonly reported type, affecting 58% of respondents. False chargebacks affected 37.7%, while cash-on-delivery return fraud affected 30%.

“Indian businesses have moved well past asking whether digital payments work, to whether their payment infrastructure is fast, reliable and intelligent,” said Sivaramakrishnan Iswaran, CEO of Zoho Payment Technologies and Global Head of Finance and Operations BU, Zoho. “Businesses expect their payment stack to be deeply connected with their financial and ERP systems.”

The survey was conducted by Zoho Payments using Zoho Survey and covered businesses across India.