If you’re running a Shopify store in India, choosing the right payment gateway is one of the most commercially important decisions you’ll make. Get it wrong and you’ll lose sales to checkout friction, pay unnecessarily high transaction fees, or find yourself unable to accept the payment methods your customers actually prefer.
This guide compares the major Shopify payment gateways available to Indian merchants in 2026 — Razorpay, Paytm, Cashfree, PayU, Instamojo, and CCAvenue — across the factors that actually matter: fees, UPI support, EMI options, settlement speed, integration quality, and Shopify compatibility.
Why Payment Gateway Choice Matters More in India
India’s payment landscape is uniquely complex. Unlike the UK or US — where cards and PayPal dominate — Indian customers use a diverse mix of payment methods:
- UPI (Google Pay, PhonePe, Paytm, BHIM) — by far the most popular payment method for online purchases, particularly on mobile
- Debit cards — widely used but require 3DS authentication (OTP-based), which adds a step to checkout
- Credit cards — popular among higher-income urban buyers; EMI options on cards significantly improve conversion for higher-ticket items
- Net banking — still used, though declining as UPI absorbs this use case
- BNPL (Buy Now Pay Later) — growing rapidly; options like Simpl, ZestMoney (now LazyPay), and Snapmint cater to buyers who want to split payments
- COD (Cash on Delivery) — still a significant portion of orders, particularly in Tier 2/3 cities and for first-time online shoppers
Your payment gateway must support all of these — not just cards — to avoid leaving money on the table.
How Shopify Payment Gateways Work in India
Shopify Payments (Shopify’s own gateway) is not available in India as of 2026. Indian merchants must use a third-party payment gateway integrated via Shopify’s payment partners programme.
This means you pay both:
- Shopify’s transaction fee — 2% on Basic, 1% on Shopify plan, 0.5% on Advanced (waived if you use Shopify Payments, but Shopify Payments isn’t available in India)
- Your gateway’s processing fee — typically 1.8–2.5% per transaction
This dual-fee structure is an important consideration. For high-volume stores, upgrading to the Shopify plan (₹6,600/month) to halve the transaction fee often pays for itself.
Razorpay
Overview
Razorpay is the market leader for Indian Shopify stores and the default recommendation for most merchants. Founded in 2014, it’s trusted by over 8 million businesses in India and has the most polished Shopify integration of any domestic gateway.
Key Features
- Supports UPI, all major cards, net banking, wallets (Paytm, Amazon Pay, Mobikwik), BNPL, and EMI
- UPI Autopay (for subscriptions) — critical for Shopify subscription stores
- Smart routing — automatically selects the highest-success payment processor for each transaction
- Razorpay Magic Checkout — a one-click checkout experience that prefills customer details for returning Razorpay users (similar to Shop Pay’s value proposition)
- International payments in 100+ currencies (additional fees apply)
- T+2 settlement (can be moved to T+1 with Razorpay X)
Fees
- Domestic cards and UPI: 2% per transaction
- EMI: 1.5–2% + applicable GST
- International cards: 3%
- No setup fee, no monthly fee on the standard plan
Shopify Integration Quality
Excellent. Razorpay has an official Shopify app, webhook support, and native order sync. COD can be managed alongside digital payments in the same dashboard.
Paytm for Business
Overview
Paytm has a massive consumer user base — over 350 million registered users — which gives it a unique advantage: customers who pay via Paytm wallet don’t need to enter card details or complete OTP, reducing checkout friction significantly for that segment.
Key Features
- Strong Paytm wallet integration (relevant if your customers skew Paytm users)
- UPI, cards, net banking, Paytm Postpaid (BNPL)
- EMI on cards and Paytm Postpaid
- Paytm Sound Box integration for COD verification at delivery
Fees
- UPI: 0% (zero MDR, as per RBI guidelines)
- Cards: 1.99% standard; lower on negotiated rates for volume
- Paytm Wallet: 1.99%
Shopify Integration Quality
Moderate. The Shopify integration exists but is less polished than Razorpay’s. Some merchants report inconsistency in webhook reliability. Best suited for stores whose primary audience are known Paytm wallet users.
Cashfree Payments
Overview
Cashfree is the challenger to Razorpay — it has been aggressively competitive on fees and settlement speed, and has built a strong reputation particularly among D2C brands and marketplaces.
Key Features
- Instant settlements (T+0 available on premium plans — a genuine differentiator for cash-flow-sensitive businesses)
- Supports all standard Indian payment methods including UPI, cards, net banking, wallets, EMI
- Split payments and marketplace payouts natively built in
- Refund management is notably fast — often same-day
- Strong API documentation
Fees
- UPI: 0% (RBI zero MDR)
- Cards: 1.75–1.95% (often cheaper than Razorpay on negotiated rates)
- Net banking: ₹7–₹15 flat per transaction (very competitive for high-ticket items)
Shopify Integration Quality
Good. Cashfree has a Shopify plugin and solid webhook support. Not quite as feature-rich as Razorpay’s Magic Checkout offering, but technically reliable and well-documented.
PayU India
Overview
PayU is one of the oldest payment gateways in India (launched 2011) and has deep enterprise-client relationships. It’s owned by Prosus and is particularly strong in the enterprise and mid-market segments. For Shopify stores, it’s a solid option but not typically the best choice for new or growing stores given its more complex onboarding.
Key Features
- LazyPay BNPL built in (PayU acquired LazyPay)
- Strong EMI network across all major Indian banks
- PayU Token Hub for card tokenisation (PCI-DSS compliance)
- Customisable checkout page
Fees
- Cards: 2% standard
- UPI: 0%
- Net banking: ₹15 flat per transaction
- International: 3.5–4%
Shopify Integration Quality
Adequate. PayU has a Shopify integration but merchants occasionally report webhook delays and support response times that are slower than Razorpay or Cashfree.
CCAvenue
CCAvenue is one of India’s oldest payment gateways (founded 2001) and is technically comprehensive — it supports over 200 payment methods including some obscure regional options. However, its checkout UX is dated compared to modern competitors, and its fee structure can be complex.
It’s primarily used by stores that have existing relationships with CCAvenue or operate in sectors (government, education) where CCAvenue has historically had a stronger presence. For new Shopify stores, Razorpay or Cashfree are almost always better options.
Full Comparison Table
| Feature | Razorpay | Paytm | Cashfree | PayU | CCAvenue |
|---|---|---|---|---|---|
| Card fee (standard) | 2% | 1.99% | 1.75–1.95% | 2% | 2% |
| UPI fee | 0% | 0% | 0% | 0% | 0% |
| International payments | Yes (3%) | Limited | Yes (3.5%) | Yes (3.5–4%) | Yes (3.5%) |
| EMI support | Yes | Yes | Yes | Yes (strong) | Yes |
| BNPL | Yes (Simpl, etc.) | Paytm Postpaid | Yes (LazyPay via plugin) | LazyPay (native) | Yes |
| UPI Autopay (subscriptions) | Yes | Partial | Yes | Yes | No |
| Settlement speed | T+2 (T+1 available) | T+2 | T+0 available | T+2 | T+3 |
| Shopify integration quality | Excellent | Moderate | Good | Adequate | Basic |
| Magic/one-click checkout | Yes (Magic Checkout) | Paytm wallet | No | No | No |
| Setup fee | None | None | None | None | ₹1,200 one-time |
Our Recommendations by Store Type
New Store (under ₹5 lakh/month GMV)
Recommended: Razorpay — easiest onboarding, best Shopify integration, comprehensive payment method support, no setup fees. Start here and re-evaluate at scale.
Growing D2C Brand (₹5 lakh–₹50 lakh/month GMV)
Recommended: Razorpay + consider Cashfree as secondary — At this volume, even a 0.25% fee difference is meaningful. Cashfree’s competitive rates and T+0 settlement become attractive. Some stores run both gateways and A/B test conversion rates.
Subscription-Based Store
Recommended: Razorpay — its UPI Autopay mandate and recurring charge infrastructure is the most mature of any Indian gateway for subscription commerce on Shopify.
High-Ticket Products (₹10,000+ average order value)
Recommended: Razorpay or PayU — both have strong EMI network penetration across Indian banks, which meaningfully improves conversion on higher-ticket items by breaking the price into affordable instalments.
Store With Heavy Paytm Wallet Customer Base
Recommended: Paytm for Business — if your analytics show a high proportion of Paytm wallet users, the frictionless wallet checkout experience can improve conversion for that segment specifically.
Frequently Asked Questions
Does Shopify charge extra fees when using Indian payment gateways?
Yes. Because Shopify Payments is unavailable in India, Shopify charges a transaction fee on every order processed through third-party gateways: 2% on the Basic plan, 1% on the Shopify plan, and 0.5% on the Advanced plan. This is in addition to your gateway’s own processing fee. Upgrading your Shopify plan to reduce this fee is worth calculating at higher volumes.
Is UPI free to accept on Shopify stores?
Yes — under the RBI’s zero MDR mandate, payment gateways cannot charge a merchant discount rate (MDR) on UPI transactions. UPI is free to accept via all major gateways. However, Shopify’s platform transaction fee (1–2% depending on your plan) still applies. UPI acceptance should be enabled on every Indian Shopify store without exception — it’s the dominant payment method.
Can I accept international payments from Indian Shopify stores?
Yes — Razorpay, Cashfree, and PayU all support international card payments, typically at 3–4% processing fees. You’ll also need to ensure your business has the appropriate FEMA compliance and RBI regulations are followed for receiving foreign currency. Shopify’s multi-currency features work alongside these gateways to display prices in local currencies.
How long does it take to get approved for Razorpay or Cashfree?
Both gateways have digitised their onboarding significantly. With all documents ready (GST certificate, PAN, bank account details, proof of business address), Razorpay typically approves within 2–4 business days. Cashfree is comparable. Ensure your Shopify store has at least a functional homepage, product pages, shipping policy, and returns policy — these are checked during KYC review.
Getting your payment gateway configuration right from the start — including EMI options, UPI routing, and Shopify transaction fee optimisation — can meaningfully improve your store’s conversion rate and cash flow. If you’d like help setting up or switching payment gateways on your Shopify store, the OneOnic team is happy to help. We work with Shopify stores across India, the UK, UAE, and Australia.
