Table of contents
- 1. Key takeaways
- 2. Why you need a payment gateway
- 3. Choose a gateway
- 4. The two fees: gateway and Shopify
- 5. Tell us your products and volumes. We will set up the gateway, UPI, COD and shipping.
- 6. Set up UPI
- 7. Cash on delivery (COD)
- 8. Add COD as a manual payment method
- 9. Limit by pincode or order value
- 10. Reduce return-to-origin losses with order confirmation
- 11. GST basics for Indian stores
- 12. Shipping and couriers
- 13. Subscriptions in India
- 14. Test checklist before launch
- 15. Mistakes to avoid
- 16. What to do next
- Shopify Payments is not natively supported in India; merchants must integrate third-party gateways like Razorpay, Cashfree, or PayU.
- UPI (Unified Payments Interface) commands over 70% of digital ecommerce transactions in India.
- Cash on Delivery (COD) remains a major sales driver but carries high Return to Origin (RTO) rates without automated pre-dispatch confirmation.
- Gateway onboarding strictly requires a registered GSTIN, Business PAN, and an active current bank account.
Shopify Payments is not available in India, so you connect a gateway such as Razorpay, Cashfree, PayU or CCAvenue. UPI comes through the gateway, cash on delivery is added as a manual payment method, and gateways usually ask for GST details at signup. Verify current providers and fees.
Statutory Notice: This article is general operational guidance, not tax or legal advice. Review GST liabilities and corporate compliances with a certified Chartered Accountant (CA).
Why you need a payment gateway
Unlike merchants operating in the US, UK, or Canada, store owners in India cannot use native Shopify Payments. Attempting to launch a store without a dedicated third-party payment gateway prevents shoppers from completing checkout. To accept domestic debit cards, credit cards, net banking, and UPI, you must onboard with an authorized Indian payment aggregator registered with the Reserve Bank of India (RBI).
Choose a gateway
Selecting the right payment gateway affects your checkout conversion rate, payment failure rates, and settlement cycles:
| Gateway Provider | Primary Strengths | Key Payment Methods | Merchant Focus |
|---|---|---|---|
| Razorpay | Industry-leading API stability, seamless Shopify app integration, Magic Checkout. | UPI, Netbanking, Cards, EMI, Wallets | Fast-scaling D2C brands, luxury lifestyle, enterprise retail. |
| Cashfree Payments | Fast settlement cycles, robust auto-refund mechanisms, high UPI success rate. | UPI Intent, Cards, BNPL, Netbanking | High-volume merchants, subscription platforms, D2C startups. |
| PayU India | Extensive banking partnerships, strong international card acceptance. | Cards, UPI, Netbanking, BharatQR | Enterprise retail conglomerates, cross-border sellers. |
| CCAvenue | One of India’s oldest gateways with unmatched public sector banking integrations. | 200+ payment options, multi-currency | Institutional merchants, traditional businesses. |
The two fees: gateway and Shopify
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When running a Shopify store in India, remember that transaction costs consist of two distinct charges:
- Payment Gateway MDR (Merchant Discount Rate): Gateways typically charge around 2% for domestic credit cards, debit cards, and netbanking (with zero MDR or minimal fees on standard consumer UPI depending on government mandates).
- Shopify Third-Party Transaction Fee: Because you are not using Shopify Payments, Shopify charges an additional third-party transaction fee based on your subscription tier (2.0% on Basic, 1.0% on Shopify, 0.6% on Advanced, and 0.2% on Shopify Plus). Factor these into your margins using our Shopify pricing analysis.
Tell us your products and volumes. We will set up the gateway, UPI, COD and shipping.
Our technical engineering team integrates payment gateways, automated WhatsApp order confirmations, and logistics aggregators for Indian ecommerce brands.
Talk to Us ↗Set up UPI
UPI (Unified Payments Interface) represents the lifeblood of Indian online shopping. Customers expect to pay directly via Google Pay, PhonePe, Paytm, or CRED with one tap on mobile or by scanning a dynamic QR code on desktop. Once your gateway is approved, enable UPI Intent flows to minimize checkout drop-offs.
Cash on delivery (COD)
Even with booming digital payments, Cash on Delivery accounts for 30% to 60% of ecommerce transactions in Tier 2 and Tier 3 Indian cities. However, unmanaged COD introduces massive operational risk via Return to Origin (RTO)—orders returned because the customer refused delivery or provided an inaccurate address.
Add COD as a manual payment method
In Shopify Admin, go to Settings > Payments > Manual payment methods. Add Cash on Delivery (COD) with clear payment terms.
Limit by pincode or order value
Use Shopify Flow or specialized apps to disable COD for high-risk pincodes with historically high fraud rates, or enforce a minimum order value (e.g., minimum ₹500, maximum ₹5,000).
Reduce return-to-origin losses with order confirmation
Never dispatch a COD parcel blindly. Trigger an automated WhatsApp message or interactive IVR call immediately after order placement asking the customer to confirm their order. This simple flow cuts RTO rates by over 40%, directly complementing your abandoned cart recovery strategy.
GST basics for Indian stores
Under Indian law, retail goods must be sold with prices inclusive of Goods and Services Tax (Maximum Retail Price - MRP). During gateway onboarding, you must supply your 15-digit GSTIN. Configure your HSN codes and GST slab rates (5%, 12%, 18%, or 28%) accurately so Shopify invoices display CGST, SGST, and IGST breakdowns correctly.
Shipping and couriers
Shipping across India requires partnering with multi-courier logistics aggregators such as Shiprocket, Delhivery, Blue Dart, or Xpressbees. These platforms integrate with Shopify to automatically assign couriers based on pincode reliability, print shipping labels, and streamline COD cash remittance back to your bank account.
Subscriptions in India
RBI regulations mandate e-mandate frameworks with Additional Factor of Authentication (AFA) for recurring transactions. If you offer subscription products, ensure your gateway supports recurring UPI or card mandates.
Test checklist before launch
- Perform a live transaction using UPI and verify that the payment status changes to Paid in Shopify.
- Place a test COD order and check that automated order confirmation triggers.
- Download a generated tax invoice to ensure your GSTIN and HSN codes render properly.
- Test cross-border checkout if selling globally via Shopify Markets international.
Mistakes to avoid
- Launching Without UPI: Forcing customers to enter 16-digit card numbers destroys mobile conversion in India.
- Ignoring RTO Shipping Costs: Paying double courier charges on rejected COD parcels can wipe out operating profits.
- Slow Mobile Checkout: Optimize page speed relentlessly; over 90% of Indian online retail occurs on smartphones.
What to do next
Build a powerhouse Indian D2C brand. Consult our Shopify store design and development team and partner with our dedicated India Shopify agency specialists to launch your high-converting storefront.
Notice: This article is general operational guidance. Always consult a certified Indian Chartered Accountant for tax and company registration advice.
