Your Shopify store is live, the products are photographed, and then checkout asks you to choose a payment provider. In India that screen is less obvious than it looks: the provider Shopify pushes hardest elsewhere isn't available here, and half your customers will want UPI or cash on delivery.
Here's the short answer. Indian Shopify merchants connect a third-party gateway (Razorpay is one common option) for UPI, cards, netbanking and wallets, and add cash on delivery as a manual payment method. The rest of this post is the setup path, what each piece costs according to the vendors' own pages, and how to keep COD from eating your margin. Everything below was checked on 2026-10-09. Where a page was blocked or didn't say, I've said so.
Can you use Shopify Payments in India?
No, based on Shopify's own list. Shopify's supported countries page for Shopify Payments (help.shopify.com, checked 2026-10-09) lists 40 countries and regions, including the US, the UK, Canada, Australia, Singapore, Hong Kong and the UAE. India isn't there. The page says that if a country isn't listed you need a third-party payment provider.
Two consequences:
- You'll connect a third-party gateway. Shopify's help page says activating a provider is done from the Payments page in admin, and that "Third-party transaction fees apply to all transactions processed through third-party and alternate payment gateways." The page doesn't give the rate for India; it says to check Shopify's pricing page or contact Support. Look at your plan's current fee before you model margins. Don't take a number from a blog post, including this one.
- UPI isn't switched on by Shopify itself. Shopify's Payments help page doesn't mention UPI or India, so UPI comes through your gateway.
Where does Razorpay fit?
Razorpay is a payment gateway: it takes UPI, cards, netbanking and wallets from the customer and settles the money to your bank. Shopify talks to it through an app called Razorpay Secure.
What the docs say (Razorpay's Shopify integration prerequisites page, checked 2026-10-09):
- The integration is listed as available in India, Malaysia, Singapore and the United States.
- You need a Razorpay account and a Shopify account.
- Only Razorpay account owners can connect Shopify with Razorpay.
- API keys are not required for this integration.
What I could not fully confirm: the page I reached did not list which payment methods the app supports for India. The integration-steps page I fetched showed a payment-method table with cards and ACH, which looks like a US-region page, so I'm not going to repeat it as the India list. Razorpay's main pricing page does list UPI, netbanking and wallets as domestic instruments, and merchants commonly use the app for those, but I could not verify that exact mapping on the Shopify app page. Open the Razorpay Secure listing in the Shopify App Store and the India docs before you promise your customers a specific method.
Setup: connecting Razorpay to Shopify, step by step
From Razorpay's integration-steps page (checked 2026-10-09):
- Create a Razorpay account and complete KYC. Until KYC is done you can test in test mode. The page lists the required documents; check the current list there rather than guessing.
- Open the Razorpay Secure app in the Shopify App Store and click Install, then confirm Install again.
- On the landing page, choose your company's registered country and select the option for existing users.
- Log in with owner credentials. The page is explicit: "Make sure you log in with owner credentials to connect Razorpay with Shopify successfully."
- On the Shopify activation screen, click Activate. Razorpay Secure then appears as a payment gateway at checkout.
- Place a test order in test mode, then work through the go-live checklist Razorpay links from that page.
Two things to do yourself that the docs won't decide for you: place a real small-value order after going live (refund it afterwards) and check which methods actually appear at checkout on a phone. Razorpay's FAQ page for the app (checked 2026-10-09) lists these limits: only 2-decimal currencies such as INR, USD and EUR, one Razorpay account per store, and you can't reorder Razorpay Secure among your checkout gateways from Shopify settings. I could not find any statement on Route (split payments) or Subscriptions (recurring billing) on the pages I could read, so I'm not claiming either way. If you need them, ask Razorpay support before choosing this route.
What does Razorpay cost on Shopify?
From Razorpay's pricing page (checked 2026-10-09):
| Item | What the page says |
|---|---|
| Domestic cards, UPI, netbanking, wallets | 2% platform fee across domestic instruments |
| Corporate or business credit cards | 2.15% |
| International cards | Up to 3% |
| GST | 18% charged on Razorpay's fee, not on the sale amount |
| Setup fee | Rs. 0 (AMC and refund processing fees also Rs. 0) |
| Settlement | Page says T+1 or instant settlement; instant is an optional add-on with separate pricing |
Caveats worth knowing:
- The page is inconsistent on UPI. The domestic table says 2%, but another section lists UPI QR at 0.99%. Treat 2% as the figure for ordinary checkout and confirm yours in the dashboard.
- Our Cashfree vs Razorpay comparison says Razorpay settles T+2 by default. The pricing page I fetched today says T+1. Settlement terms differ by account and may have changed, so ask Razorpay what your account gets before you plan cash flow around it.
- Add Shopify's own third-party transaction fee on top, which depends on your plan.
A worked example, with numbers I computed from the 2% rate above and 18% GST on the fee: on a Rs. 1,000 prepaid order, Razorpay's fee is Rs. 20, GST on that is Rs. 3.60, so about Rs. 23.60 comes off before any Shopify transaction fee. Check that against a real settlement report, since your negotiated rate may differ.
If you want to compare against another gateway, the Cashfree vs Razorpay post covers pricing and developer experience. If you're curious about where payments are heading, agentic payments on Claude with Razorpay and UPI is a pilot, not something you can switch on for a store today.
How do you set up cash on delivery on Shopify?
COD is a manual payment method, set up in Shopify admin (Shopify help page on manual payments, checked 2026-10-09):
- Go to Settings > Payments.
- Under Manual payment methods, pick a suggested method or choose Create custom payment method. The page says a custom name can't be "Cash on Delivery (COD)" because Shopify reserves that name, so check what name Shopify offers you in the suggested list.
- Under Additional details, add what should show next to the method at checkout.
- Under Payment instructions, say how the customer pays. This shows on the order confirmation page.
- Click Activate.
What happens after: manual-payment orders appear as unpaid (pending). After you collect the money, mark the order as paid and fulfil it. The page also says you aren't charged third-party transaction fees for manual payments.
The page does not say whether COD orders get extra fraud checks or confirmation. That part is up to you, which brings us to the real cost of COD.
COD risk and RTO: what you can and can't claim
RTO (return to origin) is when a COD parcel is refused or undeliverable and comes back. You pay outbound shipping, return shipping, packaging and the lost sale. The pattern merchants describe is that COD brings more RTO than prepaid, but I found no independent dataset I could trust, so I won't quote a rate.
Here are the levers, and the honest status of the evidence for each:
| Lever | How it works | Evidence I found |
|---|---|---|
| Confirm before dispatch | WhatsApp or SMS message asking the buyer to confirm the order and address | App vendors and agencies recommend it; their claimed RTO reductions range from 15 to 25 percent up to 30 to 40 percent, with no independent source |
| Nudge to prepaid | Small prepaid discount or payment link sent to COD buyers | Vendor figures for conversion differ a lot (about 8 to 12 percent in one, 15 to 30 percent in another); treat as indicative |
| Address and pincode validation | Catch incomplete addresses before shipping | Common advice, no verified numbers |
| Risk-based COD | Hide or restrict COD for risky orders | Razorpay's Magic Checkout page describes a risk engine that nudges high-risk buyers to prepay, charges differential COD fees for medium risk and disables COD for high risk; all vendor marketing, and I could not confirm it works with Shopify or what it costs |
| Cap COD order value | Allow COD only below an amount you set | Your call; use your own loss data |
My suggestion, not a verified result: add a confirmation step first because it's cheap, then measure RTO per cohort for a month. Compare orders that were confirmed with orders that weren't, not this month with last month, because seasonality will fool you. Only then pay for risk tooling.
Also remember cash in COD doesn't come to you at checkout. It reaches you through your courier's remittance cycle, so factor that delay into your working capital.
Decision table: which setup fits your store?
| Your situation | Suggested setup | Why |
|---|---|---|
| New store, low volume, mixed buyers | Razorpay Secure app for prepaid plus COD as a manual method | Fewest moving parts; you can add tooling later |
| Most customers want COD and RTO is hurting | Same setup, plus pre-dispatch confirmation and a prepaid nudge | Fix the cheap thing first; measure per cohort |
| You need subscriptions or split payments | Ask Razorpay whether the Shopify app supports Route or Subscriptions; I couldn't confirm either way | Verify before building around it |
| Fees are your main concern | Compare Razorpay with Cashfree and others on your own volume | Rates differ and are negotiable at scale; see the comparison |
| You sell internationally too | Check international card rates (Razorpay lists up to 3 percent) and whether the app supports your currencies | I did not verify multi-currency behaviour on Shopify |
| Very high COD share, low trust | Consider prepaid-only for risky categories | Your own loss data should decide, not a rule of thumb |
I haven't compared PayU, Cashfree or other gateways' Shopify apps on their own docs for this post. Roundup articles list them as Shopify-compatible for India, but those are third-party claims, so verify on each vendor's page.
Who should skip this setup
If your volume is tiny and you're selling to friends and family, a plain payment link or UPI QR may be enough while you validate demand. If you need recurring billing or marketplace splits, ask Razorpay about those features before installing. And if you already have a gateway working, don't switch for a fraction of a percent without running real numbers from your settlement report.
For the rest of the store, you might find AI agents for Indian e-commerce useful, especially for order and inventory workflows.
If you decide Razorpay is right, you can sign up through this Razorpay link. Some links on this page are affiliate links; they cost you nothing and I only link tools I'd mention anyway. The setup above works the same if you don't use the link, and Cashfree is a reasonable alternative.
