In short
- Shopify Payments is not available to India-based stores, so Indian merchants choose a third-party gateway such as Razorpay, Cashfree or PayU.
- As of September 2026, the standard published domestic rate is about 2% for Razorpay and PayU and 1.95% for Cashfree, plus 18% GST on the fee.
- On non-Plus plans, Shopify adds its own transaction fee of 2%, 1% or 0.6% on third-party gateway payments, which often matters more than the gateway rate.
- Payment success rate, UPI experience, settlement speed and COD tools usually affect profit more than a 0.05% difference in fees.
- Negotiate rates once you have steady volume, and review your gateway every year rather than treating it as a one-time decision.
For an India-based Shopify store, the choice is really between Razorpay, Cashfree and PayU, because Shopify Payments is not available in India. All three publish similar standard rates of around 2% per domestic transaction, so the best payment gateway for Shopify India depends less on the headline fee and more on payment success rates, UPI experience, settlement speed, COD tools and the rate you can negotiate at your volume.
This comparison uses each provider's published pricing as of September 2026 and shows how Shopify's own transaction fee changes the real cost.
First, why Shopify Payments is not on the table
India does not appear on Shopify's list of supported countries for Shopify Payments. Shopify's guidance is that if your country is not listed, you need a third-party payment provider. Shopify Payments only becomes relevant if you operate a separate business and store in a supported country, such as a US entity selling to American customers.
This matters for cost. On non-Plus plans, Shopify charges a transaction fee on payments through third-party gateways: 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus, according to Shopify's India pricing page. That is on top of whatever your gateway charges.
Published gateway fees compared (as of September 2026)
| Payment type | Razorpay | Cashfree | PayU |
|---|---|---|---|
| Domestic cards, netbanking, wallets | 2% | 1.95% | 2% |
| UPI | 2% platform fee (zero MDR on standard UPI) | Platform fee per published terms | Varies by business type and volume |
| International cards | Up to 3% | 2.99% | 3% |
| Amex and Diners | Corporate cards 2.15% | Amex 2.95% | 3% |
| Setup and annual fee | ₹0 | Zero setup fee | None |
| GST on fees | 18% | 18% | 18% |
Sources: Razorpay pricing, Cashfree payment gateway charges and PayU pricing. Gateways update pricing and run promotional offers often, so check the live pages and ask for a written quote before you decide.
Worked example: the real cost per month
Take a hypothetical brand on the Grow plan doing ₹25 lakh a month in online orders, with 60% prepaid (₹15 lakh) and 40% COD.
| Cost line | Calculation | Monthly cost |
|---|---|---|
| Gateway fee at 2% | ₹15,00,000 × 2% | ₹30,000 |
| GST on gateway fee | ₹30,000 × 18% | ₹5,400 |
| Shopify transaction fee on Grow | ₹15,00,000 × 1% | ₹15,000 |
| Shopify fee on COD orders | Manual payment, not charged | ₹0 |
| Total payment cost | ₹50,400 |
Switching to a gateway 0.05 percentage points cheaper would save about ₹750 a month. Improving payment success rate by even one percentage point on ₹15 lakh of attempted prepaid orders recovers around ₹15,000 in sales. That is why success rate usually beats headline rate.
Note that Shopify does not charge its transaction fee on manual methods like COD, as confirmed in its manual payments documentation. COD still costs you courier charges and return-to-origin losses.
What to compare beyond fees
1. Payment success rate
Ask each provider for success rates by method (UPI, cards, netbanking) for merchants in your category, and measure your own after switching. Watch UPI especially, as it is often the largest prepaid method for Indian D2C brands.
2. Checkout experience
How the payment page looks and loads on a mid-range Android phone matters. Test UPI intent flows (opening the customer's UPI app directly), saved cards and how failures are handled.
3. Settlement speed and cash flow
PayU publishes T+2 as its standard settlement, and faster settlement options are common across providers, sometimes at extra cost. If you reorder inventory weekly, faster settlement can be worth paying for.
4. COD and RTO tools
Some gateways offer checkout products that include COD risk scoring, partial prepayment or COD-to-prepaid nudges. These can reduce return-to-origin losses, but they often replace Shopify's native checkout experience, which affects apps, discounts and tracking. Evaluate them as a checkout decision, not just a payment decision.
5. International payments
If you sell abroad, compare international card rates, currency support and how chargebacks are handled. Rates of around 3% are typical on published pricing.
6. EMI and pay later
For higher-priced products such as furniture, electronics or jewellery, EMI and pay later options can lift conversion. Check which options each provider supports and the extra fees involved, such as Cashfree's published 2.2% for credit card EMI.
7. Support and account stability
Ask how quickly the provider responds to a settlement hold or account review. A paused gateway during a sale costs more than any fee difference.
Quick recommendations by situation
| Your situation | What to prioritise |
|---|---|
| New store, low volume | Easy onboarding, clean Shopify integration, zero setup fee; any of the three works |
| Growing D2C brand, high UPI share | UPI success rate and checkout speed; negotiate rates once volume is steady |
| High COD share with RTO problems | COD verification and prepaid nudges; weigh any checkout replacement carefully |
| International customers | International card rates, multi-currency support, chargeback handling |
| High-ticket products | EMI and pay later coverage |
Questions to ask before you sign
Gateway sales conversations move fast. Use this list so you compare providers on the same terms:
- What rate will you give us for our expected monthly volume and payment mix, in writing?
- Is the rate the same for UPI, cards and netbanking, or are there method-specific charges?
- What are your charges for international cards, Amex, corporate cards and EMI?
- What is standard settlement, and what does faster settlement cost?
- Are there refund, chargeback or dispute handling fees?
- What success rates do you see for UPI and cards in our category?
- How does your Shopify integration work, and who supports it when something breaks?
- What triggers an account review or settlement hold, and how quickly is it resolved?
Common mistakes Indian stores make
- Choosing on headline rate alone. A 0.05% saving is trivial next to a drop in UPI success rate.
- Forgetting the Shopify fee. On Basic, the Shopify transaction fee equals the gateway fee, doubling your payment cost on prepaid orders.
- Ignoring GST on fees. GST at 18% on the gateway fee adds meaningfully to cost; if you are GST registered, ask your CA about input tax credit.
- No backup plan. Keep a second provider's KYC complete so you can switch within hours if needed.
- Switching during peak season. Make gateway changes well before festive or sale periods.
How to switch gateways without losing sales
- Complete KYC with the new provider and get your account fully activated before touching Shopify.
- Install the provider's Shopify integration and configure it in test mode where available.
- Switch during a low-traffic window, never on a sale day.
- Place live orders through UPI, card, netbanking and wallet, then refund them.
- Check that purchase tracking still fires once per order, since gateway redirects can affect analytics.
- Keep your old gateway account open for refunds on earlier orders.
The plan you are on matters too. As the example shows, moving from Basic to Grow halves the Shopify transaction fee, which can save more than any gateway negotiation. For more on reducing checkout friction, see our guide to mobile checkout optimisation.
Setting up payments the right way
Your gateway sits at the most sensitive point of the customer journey. If you want help choosing a provider, configuring COD rules and testing every payment path on a new or redesigned store, The Night Marketer's Shopify web design and development team can set it up and hand it over with a tested checklist.
Frequently asked questions
Not for an India-based store. India is not on Shopify's list of countries where Shopify Payments is supported, so Indian merchants must use a third-party provider. Shopify Payments is relevant only if your business entity and store are set up in a supported country, such as the US or UK, which some Indian founders do for international brands.
On standard published pricing as of September 2026, Cashfree lists 1.95% for domestic payments, while Razorpay and PayU list around 2%, all plus GST on the fee. These differences are small, and all three negotiate for volume. Compare quoted rates for your actual payment mix, including international cards and EMI, rather than headline rates.
No. Cash on Delivery is a manual payment method, and Shopify's documentation says you are not charged third-party transaction fees on manual payments. You still pay courier COD charges and absorb return-to-origin costs, so COD is not free, but it does not attract the Shopify transaction fee.
It depends on your COD share and how much you rely on Shopify-native features. Third-party checkouts can add address prefill, COD risk controls and prepaid nudges, which some Indian brands value. They also replace parts of Shopify checkout, which can affect discount apps, tracking and upgrades. Test on a share of traffic and compare conversion, RTO and margin before committing.
Standard settlement is usually two business days after the transaction, and PayU publishes T+2 as its standard. Most gateways offer faster or instant settlement for an extra fee or based on your business profile. For cash-flow-sensitive brands, the cost of faster settlement can be worth more than a small fee difference.