Photo: Unsplash — Shopify Payment Gateway India
The Payment Gateway Problem Every Indian Shopify Merchant Faces
Setting up payments on Shopify in India is more complex than in the US or UK, for one critical reason: Shopify Payments is not available in India. While merchants in 23 countries can use Shopify's own payment processor and avoid transaction fees, Indian merchants must use third-party payment gateways — and pay an additional Shopify transaction fee (0.5%–2%) on every sale, on top of the gateway's processing fee.
Understanding your payment gateway options, their fees, features, and Shopify integration quality is one of the most financially significant decisions you'll make for your Indian Shopify store. On a store doing ₹50 lakh per year in revenue, the difference between gateways and Shopify plan choices can mean ₹50,000–3,00,000 in annual cost variation. This guide gives you a complete, data-driven comparison to make the right choice.
Why Shopify Payments Isn't Available in India
Shopify Payments is powered by Stripe, which launched in India but faced Reserve Bank of India (RBI) compliance challenges around recurring payments, KYC requirements, and the mandate for domestic payment processing infrastructure. As of 2026, Shopify Payments remains unavailable for Indian merchants. Indian stores are classified as "third-party gateway" stores and incur additional transaction fees on every plan except Shopify Plus (which can negotiate zero transaction fees directly).
— Razorpay charges: 2% MDR = ₹20 + ₹3 = ₹23 (+ 18% GST on fee = ₹27.14 total gateway cost)
— Shopify charges: 2% transaction fee = ₹20
— Total cost to accept payment: ₹47.14 (4.71% of transaction value)
On the Shopify plan (1% transaction fee): ₹23 + ₹10 = ₹33 (3.3% total)
On Advanced (0.5%): ₹23 + ₹5 = ₹28 (2.8% total)
Major Payment Gateways for Shopify India (2026)
1. Razorpay — Most Popular Choice
Razorpay is the go-to payment gateway for Indian Shopify stores. Its native Shopify plugin is actively maintained, setup is straightforward, and the dashboard is developer-friendly.
- MDR (Merchant Discount Rate): 2% + ₹3 per transaction (standard)
- International cards: 3% MDR
- Payment methods: UPI, credit/debit cards, net banking, wallets (Paytm, Amazon Pay, PhonePe), EMI, Buy Now Pay Later, QR code
- Settlement: T+2 days (next-business-day settlement available on premium plans)
- Monthly fee: None (pay per transaction)
- KYC requirements: PAN, bank account, business documents; typical approval in 24–48 hours
- Shopify integration: Official Shopify app; works with Shopify's native checkout
Best for: Most Indian Shopify stores. Excellent balance of features, reliability, and developer support.
Cons: Support can be slow for smaller merchants; dispute resolution process can be bureaucratic.
2. Cashfree Payments — Best for High Volume
Cashfree is rapidly gaining market share among larger Indian eCommerce businesses. Its rates are competitive for merchants processing over ₹5 lakh/month.
- MDR: 1.75% for most categories (negotiable for high-volume merchants)
- Payment methods: UPI, cards, net banking, wallets, EMI, international cards
- Settlement: T+2; instant settlement available
- Monthly fee: None
- Refund fee: ₹5 per refund (waived for some merchants)
- Shopify integration: Official Shopify app available
Best for: Stores with ₹5 lakh+ monthly volume wanting lower MDR; brands needing faster settlements.
Cons: Less brand recognition among customers vs Razorpay; slightly weaker checkout UI.
3. PayU — Established Enterprise Choice
PayU (owned by Prosus/Naspers) is one of India's oldest payment gateways with strong enterprise relationships and extensive payment method coverage.
- MDR: 2% standard; negotiable for enterprise accounts
- Payment methods: All major Indian payment methods including corporate credit cards, NRI cards
- Settlement: T+2
- Monthly fee: ₹0–500/month depending on plan
- Shopify integration: Available but less seamless than Razorpay's plugin
- EMI offers: Extensive bank EMI partnerships
Best for: Mid-to-large enterprises needing strong EMI options and established bank relationships for no-cost EMI deals.
Cons: Dashboard is less modern than Razorpay; Shopify integration requires more manual configuration.
4. CCAvenue — Most Payment Methods
CCAvenue is one of India's oldest and most established payment gateways, supporting the widest range of payment methods including some rare options like Diners Club cards and obscure bank net banking.
- MDR: 2% (credit cards), 1.99% (debit cards), 1.5% (UPI and wallets)
- Payment methods: 200+ options — largest range of any Indian gateway
- Setup fee: ₹2,000–5,000 (some plans waived)
- Annual maintenance fee: ₹1,200/year
- Settlement: T+3 (slower than competitors)
- Shopify integration: Works via CCAvenue's Shopify plugin
Best for: Stores serving a diverse Indian customer base needing maximum payment method coverage; travel and ticketing businesses.
Cons: Slower settlements; higher setup/maintenance costs; older UI and documentation.
5. Paytm Payment Gateway
Paytm's payment gateway is optimized for Paytm wallet users (400 million+ user base) and UPI transactions, making it a strong option for consumer-facing stores with a young, mobile-first customer base.
- MDR: 1.99% (varies by payment method)
- Payment methods: Paytm wallet, UPI, cards, net banking
- Settlement: T+2
- Shopify integration: Official Shopify app available
Best for: Stores targeting young, mobile-first Indian consumers; those wanting Paytm's extensive UPI presence.
Cons: Primarily strong for Paytm ecosystem; less compelling for card-heavy purchase categories.
Complete Fee Comparison Table
| Gateway | Standard MDR | UPI Rate | International | Settlement | Setup Fee |
|---|---|---|---|---|---|
| Razorpay | 2% + ₹3 | ~1.5% | 3% | T+2 | Free |
| Cashfree | 1.75% | ~1.5% | 2.9% | T+2 | Free |
| PayU | 2% | ~1.5% | 2.5–3% | T+2 | Free–₹500/mo |
| CCAvenue | 2% | 1.5% | 3% | T+3 | ₹2,000–5,000 |
| Paytm | 1.99% | ~1.5% | 3% | T+2 | Free |
Shopify Transaction Fee Impact by Plan
Remember: the gateway fee is only one part of your payment cost. Shopify's additional transaction fee must be factored in for Indian merchants.
| Shopify Plan | Monthly Cost | Shopify Transaction Fee | Total Cost on ₹1,000 Sale (Razorpay) |
|---|---|---|---|
| Basic | ~₹2,100/month | 2% | ₹23 (Razorpay) + ₹20 (Shopify) = ₹43 |
| Shopify | ~₹5,500/month | 1% | ₹23 + ₹10 = ₹33 |
| Advanced | ~₹21,000/month | 0.5% | ₹23 + ₹5 = ₹28 |
| Shopify Plus | ~₹1,66,000/month | 0.15% | ₹23 + ₹1.50 = ₹24.50 |
For a store doing ₹20 lakh/month revenue: upgrading from Basic to Shopify plan costs an extra ₹3,400/month in subscription but saves ₹20,000/month in Shopify transaction fees — a net saving of ₹16,600/month. The math strongly favors upgrading plans once transaction volume justifies it.
How to Set Up Razorpay on Shopify (Step-by-Step)
- Create Razorpay account: Sign up at razorpay.com. Complete KYC with PAN card, GST certificate (if registered), bank account details, and business registration documents. Approval takes 24–72 hours.
- Get API keys: In Razorpay Dashboard, go to Settings > API Keys. Generate a Key ID and Key Secret. Keep the Key Secret safe — it won't be shown again.
- Add to Shopify: In Shopify Admin, go to Settings > Payments. Under "Third-party providers", click "Choose third-party provider". Search and select Razorpay.
- Enter credentials: Paste your Razorpay Key ID and Key Secret. Save settings.
- Test in test mode: Enable test mode in both Razorpay dashboard and Shopify settings. Place a test order using Razorpay's test card numbers.
- Go live: Once satisfied, switch Razorpay dashboard to Live mode and update Shopify with your live API keys. Your store can now accept real payments.
- Configure webhooks: In Razorpay dashboard, add your Shopify webhook URL to receive payment events (order confirmation, refund processing).
GST on Payment Gateway Fees
Payment gateway fees attract 18% GST in India. This is levied on the MDR (Merchant Discount Rate) charged by the gateway.
GST calculation example:
- Sale amount: ₹1,000
- Razorpay MDR: 2% = ₹20 + ₹3 fixed = ₹23
- GST on ₹23 at 18%: ₹4.14
- Total gateway deduction: ₹27.14
- Amount received by merchant: ₹972.86 (before Shopify transaction fee)
If your business is GST-registered, you can claim Input Tax Credit (ITC) on the GST paid on payment gateway fees. This effectively reduces your net payment processing cost by 18%, making ITC registration important for stores with significant transaction volumes.
UPI on Shopify: The 2026 Landscape
UPI has become India's dominant payment method — accounting for over 60% of digital transactions by value. All major Shopify payment gateways now support UPI via their checkout flows. Key considerations:
- UPI MDR is regulated by NPCI at 0% for peer-to-peer and effectively low for merchant payments; payment gateways bundle UPI into their standard MDR
- UPI Autopay (for subscriptions) requires specific gateway configuration — Razorpay and Cashfree both support it
- UPI QR code checkout is available on mobile-responsive Shopify checkouts
- UPI Intent flow (redirecting to BHIM/GPay/PhonePe apps) reduces checkout friction significantly for mobile shoppers
International Payments on Indian Shopify Stores
If your store sells internationally (NRI customers, global shipping), you need a gateway that supports international cards and currencies. Key considerations:
- Razorpay International accepts all major credit cards (Visa, Mastercard, Amex) and requires RBI-compliant FIRA documentation for settlements above $10,000
- For high international volume, consider using a separate international gateway (Stripe, PayPal) alongside your domestic gateway
- All international receipts must be converted to INR and repatriated within 180 days per FEMA (Foreign Exchange Management Act) regulations
- Display prices in INR for domestic SEO but consider showing USD/EUR equivalents for international shoppers using a currency converter app
Quick Answers
Is Shopify Payments available in India?
No. Shopify Payments is not available in India as of 2026. Indian Shopify merchants must use a third-party payment gateway (Razorpay, PayU, CCAvenue, Cashfree, or PayTM). Because of this, Indian stores pay an additional Shopify transaction fee (0.5%–2% depending on your plan) on top of the payment gateway's own processing fee.
Which is the best payment gateway for Shopify in India?
Razorpay is the most popular choice for Indian Shopify stores due to its seamless Shopify integration, competitive 2% + ₹3 transaction fee, support for UPI, cards, net banking, and wallets, and excellent developer documentation. Cashfree is a strong alternative with slightly lower fees (1.75% for some categories) and is better for high-volume stores.
How much extra does Shopify charge Indian merchants for using third-party payment gateways?
Shopify charges an additional transaction fee on top of your payment gateway fee: 2% on the Basic plan, 1% on the Shopify plan, and 0.5% on the Advanced plan. On a store doing ₹10 lakh/month revenue, this is ₹20,000/month (Basic), ₹10,000/month (Shopify), or ₹5,000/month (Advanced) in extra Shopify fees alone.
How do I set up Razorpay on my Shopify store?
To set up Razorpay on Shopify: 1) Create a Razorpay business account at razorpay.com and complete KYC. 2) Go to your Shopify admin, Settings > Payments. 3) Under 'Third-party providers', search for Razorpay. 4) Click Activate and enter your Razorpay Key ID and Key Secret from the Razorpay dashboard. 5) Enable test mode first to verify transactions, then switch to Live mode.
Is GST applicable on payment gateway fees in India?
Yes. Payment gateway fees (MDR — Merchant Discount Rate) attract 18% GST in India. So if Razorpay charges 2% MDR on a ₹1,000 transaction, the fee is ₹20 + ₹3.60 GST = ₹23.60. The GST paid on payment gateway fees can be claimed as Input Tax Credit (ITC) if your business is GST registered.
Set Up Your Shopify Store for India
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