Shopify Payment Gateway India: Razorpay, UPI and COD Setup

If you are launching an online store, choosing a Shopify payment gateway India merchants can rely on is one of the first decisions you have to make. Shopify Payments is not available in the country, so checkout depends on a third-party provider you set up yourself.

This guide explains what that means for fees, how the common gateways compare, how cash on delivery fits in and how to test the whole checkout before launch. Figures are drawn from Shopify's and the gateways' own published pages where cited, and anything else is an indicative estimate.

Why is there no Shopify Payments in India?

Shopify Payments is Shopify's built-in processor, and it is only offered in a limited list of countries. India is not on that list, so Indian stores must connect an external provider such as Razorpay, PayU or Cashfree. You can check the current list on Shopify's Shopify Payments help page.

In practice this changes two things. You apply for a merchant account with the gateway, which needs your business documents. And Shopify charges a transaction fee on orders paid through that outside gateway, as we explain in the next section.

What does a payment gateway cost on Shopify in India?

Every prepaid order carries three charges: the gateway's fee, 18% GST on that fee, and Shopify's third-party transaction fee. Shopify's Help Center confirms that third-party transaction fees are in addition to the processing fees your provider charges, and are not returned when you refund an order.

Gateway rates differ by business category and negotiation, so treat the 2% figure as an indicative planning number and read the provider's current pricing page. Razorpay's Shopify pricing explainer walks through how the layers add up.

As a worked example, take a ₹1,000 prepaid order on the Basic plan with a gateway at 2%. The gateway fee is ₹20, GST on it is ₹3.60, and Shopify's fee is ₹20. The total is about ₹43.60, or roughly 4.4% of the order, before any discount or shipping cost. On the Grow plan the Shopify part halves to ₹10, which is why higher-volume stores often upgrade. We show the break-even in our Shopify store development cost guide.

How do Razorpay, PayU and Cashfree compare?

All three support UPI, cards, netbanking and wallets and offer a Shopify integration, so the real differences are in operations. Use this table as a checklist when you talk to each provider.

Do not choose purely on price. A gateway that has a slightly higher fee but a better UPI success rate on mobile traffic can earn you more than it costs, because more shoppers complete payment.

How should you set up UPI and cards?

UPI and cards are enabled through your gateway, so setup is mostly about getting approved and connecting it correctly. Work through these steps in order:

1. Prepare documents. Keep your PAN, GST details if registered, bank account proof and business address proof ready.
2. Complete store basics. Gateways usually look for policy pages such as returns, shipping, privacy and contact details, plus a working product catalogue.
3. Apply with your chosen gateway and share your website link for review.
4. Install or connect the gateway from Shopify's payment settings once approved, and paste the API keys as instructed.
5. Enable payment methods. Switch on UPI, cards, netbanking and wallets as offered, and set the order in which they appear.
6. Place live test orders with small amounts and refund them to check the money trail.
7. Match the settlement report with Shopify's order list so your accountant can reconcile GST.

Keep the keys in your store settings and do not share them over chat or email. If you rotate keys later, test checkout again, because a stale key silently breaks payments.

How does cash on delivery work on Shopify?

Cash on delivery in Shopify is a manual payment method, and manual methods do not attract Shopify's third-party transaction fee. You switch it on under the payment settings of your admin, and the order is marked as pending until you or your shipping partner confirm payment.

COD is attractive in India because many shoppers still want to pay on arrival. Its costs show up elsewhere, though:

• Courier COD charge: most couriers charge a fixed fee or a percentage of the order value.
• Return to origin (RTO): refused or unreachable deliveries cost you shipping both ways.
• Slower cash: money reaches you only after the courier remits it.
• Fake orders: low-intent buyers place orders they never accept.

Reduce the risk by confirming COD orders on WhatsApp or by call before dispatch, limiting COD on high-value carts and offering a small discount or free shipping on prepaid orders. Our guide to WhatsApp chatbot development shows how order confirmation can be automated, and our WhatsApp marketing service covers the messaging side.

What does a good Indian checkout look like?

A good checkout shows the right options in the right order and removes friction on mobile. These are the points that matter most for Indian buyers:

• UPI first on mobile, since most shoppers prefer paying through an app on the same phone.
• Clear COD rules, including any extra charge, shown before the final step.
• GST-aware pricing, with tax-inclusive prices that match your invoices.
• Fewer form fields, with PIN code autofill for city and state where your setup allows it.
• Trust signals, such as visible return and refund policy links near the payment step.

Checkout speed also depends on your theme and apps, so remove scripts you do not need. Our post on Shopify SEO fixes before running ads covers the wider store hygiene to complete before you send paid traffic.

What mistakes should you avoid with Shopify payments?

Most payment problems come from setup shortcuts, not from the gateway itself:

• Skipping the failed-payment test. Test what happens when a UPI request expires or a card is declined, not just the happy path.
• Leaving test mode on. Orders that look paid but never settle are a painful discovery.
• Ignoring EMI and international card rates. These are often higher than the headline rate.
• Offering COD for every order. High-value carts and new customers carry the most risk.
• Not reconciling. Match gateway payouts, Shopify orders and bank credits every week.
• Relying on one gateway during a sale. Consider a backup provider if downtime would cost you a lot.

How Arham Technology approaches Shopify checkout and payments

Payments are part of our Shopify development service, where checkout configuration for India is a core deliverable rather than an afterthought. Our process looks like this:

• Catalogue and brand intake: we map SKUs, variants and bundles so tax and shipping rules match what you sell.
• Checkout configuration: we set up payment, shipping and GST-aware tax settings for India, including your chosen gateway and COD rules.
• Theme build and app wiring: cart and checkout-adjacent sections are built with performance budgets, and unnecessary apps are removed.
• Checkout and operations dry run: test orders validate payments, shipping rates, taxes and fulfilment notifications end to end.
• Launch and growth hooks: Meta and Google ecommerce events are wired so your paid campaigns can track purchases.

If your project needs custom server-side work such as webhooks or ERP sync, our backend development service can handle that part too.

What should you do next?

Decide your mix of prepaid and COD, shortlist two gateways and ask each for written rates and a sample success-rate report. Start the approval early, because it can take longer than the theme build. If you want help with the setup, review our Shopify development service and contact us with your catalogue size and preferred gateway. We will outline the checkout configuration and a test plan before you commit.