How to accept UPI on Shopify in India: gateways, setup and the real fees

Shopify doesn't offer UPI on its own in India, since Shopify Payments isn't available here. You get UPI by connecting a gateway such as Razorpay, Cashfree, PayU or PhonePe PG, and the buyer pays through that gateway's screen with UPI intent on mobile or a QR code on desktop. Every UPI order then carries the gateway's fee plus Shopify's third-party fee, and from 15 October 2026 a 0.4% MDR applies to UPI payments above ₹2,000.

NPCI's own figures put UPI at 2,451 crore transactions worth ₹29.9 lakh crore in August 2026 alone, so it should be the easiest option at your checkout. The setup takes an afternoon. The fees take a bit more explaining, because three different parties now take a cut and one of the rules changes this month.

For all the platform costs in one place, see the Shopify pricing hub for India.

How does UPI work on a Shopify store in India?

Shopify's checkout hands the payment to your gateway. The flow looks like this:

1. The buyer fills in their address on Shopify's checkout and picks your gateway's payment option (for example "UPI, cards, wallets, netbanking").
2. Shopify redirects to the gateway's payment screen or opens it in place.
3. On a phone, the buyer taps their UPI app. That's UPI intent: the app opens with your merchant name and the amount already filled in. On a desktop, the gateway shows a QR code to scan.
4. The buyer approves with their UPI PIN, the gateway confirms the payment to Shopify, and the order is created as paid.

There used to be a third route, UPI collect, where the buyer typed their UPI ID and approved a request in their app. NPCI discontinued manual entry of a UPI ID or mobile number for payments from 28 February 2026. PayU's notice on the change lists exemptions, including some iOS app and mobile web cases and existing mandates. Your gateway decides which flow each buyer sees, so you don't configure this in Shopify. Just check that your gateway shows intent on Android and a QR code on desktop.

This also explains why some older Shopify stores saw UPI failures earlier this year. Any custom payment page still relying on typed UPI IDs stopped working for most buyers.

What does UPI cost a Shopify merchant in 2026?

There are three layers. People usually know about one of them.

Layer 1: the UPI MDR (NPCI framework)

Since January 2020, UPI and RuPay debit payments to merchants carried zero MDR by law. That changed in 2026. NPCI's FAQ dated 15 September 2026 sets out the new framework, effective 15 October 2026:

The same FAQ says small merchants under the P2PM category (up to ₹1 lakh a month through UPI QR into a personal account) stay at zero MDR. A Shopify store on a gateway isn't in that category. It also says merchants cannot pass MDR on to customers, and that UPI AutoPay mandates carry no prescribed MDR. Payments made with a credit card or credit line linked to UPI follow credit card rules instead.

Most D2C baskets in India sit near or under ₹2,000, so for many stores the new MDR touches only part of their UPI orders. If you sell furniture, electronics or jewellery, most of your UPI orders will cross the line.

Layer 2: the gateway's own fee

Gateways have charged for UPI even when MDR was zero. Razorpay's pricing page, checked on 5 October 2026, lists UPI as "Zero MDR, 2% platform fee applies," plus 18% GST on the fee. Cashfree lists a 1.95% to 2% platform fee across methods including UPI. PayU says UPI pricing "varies by business type and volume."

How each gateway folds the new 0.4% MDR into these numbers isn't public yet as I write this. Some may absorb it inside the platform fee, others may list it separately. Check your gateway's rate card and your first settlement report after 15 October.

These are list prices. Once you have steady volume, the UPI rate is the first thing I'd negotiate, since it's usually your biggest payment method.

Layer 3: Shopify's third-party fee

Because the payment goes through a third-party gateway, Shopify charges its third-party transaction fee on UPI orders. This is the layer most UPI guides leave out.

Cash on Delivery, as a manual payment method, is the only common Indian payment type without this fee.

Worked example: two UPI orders on the Grow plan

Razorpay standard pricing, Grow plan, ignoring the new MDR (which may or may not appear as a separate line on your gateway):

So "UPI is free" isn't true for a Shopify store, and hasn't been for a while. On list prices, a UPI order costs you a bit over 3% on Grow and a bit over 4% on Basic. If you're registered for GST, you can claim the GST on the gateway fee as input credit. The Shopify subscription prices above are shown excluding taxes, so check your Shopify invoice for any GST added.

For the plan-level fee maths, see Shopify transaction fees in India. Remember the plan crossover only counts prepaid sales, UPI included. On monthly billing, Grow beats Basic above roughly ₹5,45,300 a month of prepaid sales.

How do you set up UPI on Shopify, step by step?

Here's the setup with Razorpay, following Razorpay's own integration guide. Cashfree, PayU and PhonePe PG follow the same pattern with their own apps.

1. Create a Razorpay account and finish KYC. You'll need PAN, bank details and identity verification. Business documents depend on your business type. If you don't have GST yet, see selling on Shopify without GST first.
2. Wait for activation. Razorpay confirms by email and WhatsApp.
3. Install the Razorpay Secure app on your Shopify store, choose your country, select "I am an existing user" and log in with the owner credentials. Razorpay's guide flags the owner login as important for the connection to work.
4. Activate it on the screen that appears in your Shopify admin. Razorpay Secure then shows up under Settings, then Payments, and at checkout.
5. Check UPI is switched on in the Razorpay dashboard's payment methods.
6. Test with test mode on in both places. Razorpay's guide points out that Shopify's test mode is a separate toggle from the Razorpay dashboard. Place a UPI test order and confirm it under Transactions, then Payments.
7. Go live: untick test mode in Shopify, switch Razorpay to live mode with live API keys, and place one real low-value UPI order yourself.
8. Add Cash on Delivery as a manual payment method if you offer it. Most Indian stores run UPI and COD side by side.

Then open your store on an Android phone and pay with UPI from start to finish. Count the taps. If UPI takes more taps than COD, buyers will notice before you do.

How do you get more buyers to pay by UPI?

• Make UPI visible. Check how your gateway's option reads at checkout. If UPI is buried after "cards, wallets, netbanking," ask your gateway whether the label can be changed.
• Give prepaid a reason. A small prepaid discount moves COD buyers to UPI. I go through the levers in COD charges and prepaid share.
• Watch the success rate. A failed UPI payment often turns into an abandoned checkout or a COD order. Your gateway dashboard shows UPI success rates; compare them month on month.
• Speed up the page. The gateway screen loads on top of your checkout. On a slow mobile connection, every second before the UPI app opens costs you buyers.

What goes wrong with UPI on Shopify?

The problems I see most often are boring ones:

• Test mode left on. One toggle in Shopify, one in the gateway. If either is still in test mode, real buyers see a failure. Check both after go-live.
• Orders paid but not created. The buyer paid in their UPI app but closed the tab before returning. The gateway still sends the confirmation to Shopify, but check your gateway dashboard against Shopify orders for the first few weeks so you catch any gap.
• Two gateways fighting. Running a checkout app and a separate gateway app, both offering UPI, confuses buyers and splits your reporting. Pick one primary path.
• Refunds in two places. Decide whether your team refunds from the Shopify order page or the gateway dashboard, and stick to it, so the two records match when you reconcile.

What I'd do

For a new store, I'd start with Razorpay or Cashfree on standard pricing, switch on UPI, cards, netbanking and wallets, and add COD with sensible limits. That covers how almost every Indian buyer wants to pay.

After the first couple of months, I'd pull the gateway report and check two numbers: UPI's share of prepaid orders and the UPI success rate. If UPI is most of your prepaid volume, take that to your gateway and ask for a lower UPI rate. After 15 October, I'd also read the first settlement report line by line to see how the new MDR shows up.

When I build checkout flows, I test the payment path on a mid-range Android phone on mobile data, not on office Wi-Fi. Mahina, the Gurgaon period care brand I built for, hit 95+ on speed, and the payment step is where that kind of work pays off.

If you want UPI, COD and your gateway set up properly, with the fees modelled against your real order mix, tell me about your store. For what the platform itself costs, see the pricing hub.

Related reads

• Shopify payment gateways in India: Razorpay vs PayU
• Shopify transaction fees in India
• Why your Shopify checkout abandons in India

Sources

• NPCI: FAQs on MDR on select UPI (P2M) transactions, 15 Sept 2026
• MediaNama: India sets ₹2,000 threshold for MDR-free UPI payments (Sept 2026)
• PayU docs: UPI collect disablement information
• Razorpay pricing
• Razorpay: Shopify Razorpay Secure integration steps
• Cashfree payment gateway charges
• PayU pricing
• Shopify Help Center: third-party payment providers
• Shopify Help Center: manual payment methods
• Shopify Help Center: Shopify Payments supported countries
• Shopify India pricing