How to Set Up UPI Payments on Shopify and WooCommerce

In India, Unified Payments Interface (UPI) accounts for the vast majority of digital consumer transactions. If your online store does not offer fast, one-click UPI checkout through apps like Google Pay, PhonePe, or Paytm, you are likely losing customers right at the checkout screen. Setting up UPI payments on Shopify and WooCommerce requires integrating third-party payment gateways such as Razorpay, Cashfree, or PayU, but the technical setup and ongoing transaction costs differ significantly between the two platforms.

While both platforms allow Indian merchants to accept instant UPI payments, WooCommerce offers direct access to native gateways without added platform penalties. Shopify provides rapid integration but charges an additional 0.5% to 2% transaction fee on third-party gateways unless you use approved payment routing. This guide explains how to configure UPI payments on both Shopify and WooCommerce, compare the real costs involved, and optimize your store for higher checkout conversions.

Why UPI payments are essential for Indian e-commerce

Indian shoppers expect a quick mobile payment experience. Entering credit card numbers, expiry dates, and waiting for SMS One-Time Passwords (OTPs) introduces friction that increases cart abandonment. UPI eliminates this friction by launching payment apps directly on mobile phones or displaying a dynamic QR code on desktop screens.

• Higher conversion rates: Mobile shoppers complete UPI transactions in under ten seconds without leaving their preferred payment app.
• Lower transaction failure rates: Bank server timeouts are significantly lower on UPI compared to traditional net banking or card 3D-Secure authentication.
• Reduced Cash on Delivery reliance: Customers who trust seamless digital payment modes are far more willing to prepay for orders, reducing costly Return to Origin (RTO) rates.

How to set up UPI payments on Shopify

Shopify does not offer native UPI processing directly through its standard core software in India. Instead, you must install an officially supported payment gateway application from the Shopify App Store. The most popular gateways for Shopify in India are Razorpay, Cashfree Payments, and PayU.

To connect Razorpay or Cashfree to your Shopify store, follow these steps:

1. Create and verify an active merchant account on Razorpay or Cashfree with your business documents and bank account details.
2. Log in to your Shopify Admin panel and navigate to Settings, then select Payments.
3. In the Supported Payment Methods section, click Add Payment Methods and search for Razorpay or Cashfree.
4. Install the app and paste your merchant Key ID and Key Secret generated from your payment gateway dashboard.
5. Enable UPI intent payments, dynamic QR codes, and net banking options inside your gateway settings, then test the payment flow in test mode before going live.

How to set up UPI payments on WooCommerce

WooCommerce provides total freedom when integrating payment gateways. Because WordPress is open source, you can install official open-source plugins from Razorpay, Cashfree, PayU, or Instamojo without paying extra platform fees. If you want to dive deeper into platform differences, read our detailed comparison on Shopify vs WooCommerce for selling online in India.

To set up UPI on WooCommerce using Razorpay:

1. Install the official Razorpay for WooCommerce plugin from your WordPress plugin directory.
2. Navigate to WooCommerce, select Settings, and click on the Payments tab.
3. Enable Razorpay and click Manage to open the gateway settings page.
4. Enter your Live API Key ID and Key Secret obtained from your Razorpay Merchant Dashboard.
5. Enable UPI Auto-redirect and Webhooks to ensure order status updates automatically when a payment completes.

Comparing costs: Payment gateway fees on Shopify vs WooCommerce

Understanding the total financial fee structure is vital for store margins. Payment gateways in India typically charge a standard transaction fee of around 2% plus GST (18% on the fee) for domestic UPI and debit card transactions.

However, Shopify charges an additional platform fee on all third-party payment gateways depending on your subscription plan (typically 2.0% on Basic, 1.0% on Shopify, and 0.5% on Advanced). This means a transaction processed via Razorpay on a Basic Shopify plan can cost up to 4% total per transaction.

In contrast, WooCommerce charges zero additional platform fees on transactions. You only pay the direct fee charged by your gateway provider (e.g., standard 2% + GST). For stores doing high sales volumes, this fee difference represents significant monthly savings.

Documents required for payment gateway approval in India

Before accepting real payments on either platform, payment aggregators regulated by the Reserve Bank of India (RBI) require full KYC business verification. Make sure you have the following ready before registering:

• Business registration document: GST registration certificate, Shop and Establishment license, or Partnership/LLP/Company registration.
• PAN Card details: Business PAN card and personal PAN card of the proprietor or authorized directors.
• Bank account proof: Cancelled cheque or bank statement matching your registered business name.
• Website policy pages: mandatory Privacy Policy, Terms & Conditions, Cancellation/Refund Policy, and Contact Us page with physical address.

Strategies to reduce Cash on Delivery (COD) using UPI discounts

Cash on Delivery accounts for high logistics overheads and high return rates across Indian e-commerce. You can actively shift customers to prepaid UPI orders by offering automated prepaid incentives during checkout.

Both Shopify and WooCommerce support apps and plugins that automatically apply a small flat discount (e.g., ₹50 off or 5% discount) whenever a customer selects UPI at checkout. Alternatively, you can charge an additional fee (e.g., ₹60 COD handling fee) for cash payments to make UPI the obvious economical choice.

Frequently asked questions

Do I need a registered company to accept UPI payments on my store?

Yes, payment aggregators in India like Razorpay and Cashfree require business verification. You can register as a Sole Proprietorship using a GSTIN or Business License alongside your personal PAN and bank account.

Can I accept international credit cards alongside Indian UPI?

Yes, payment gateways like Razorpay allow you to enable international card payments in your merchant dashboard, although international card transactions usually incur higher fees around 3% to 4% per sale.

What happens if money is deducted from a customer account during a failed UPI checkout?

If a transaction fails due to network issues after the money leaves the customer account, payment aggregators handle automatic reconciliation. The amount is refunded automatically to the customer bank account within 3 to 5 business days.

If you need help configuring payment gateways, setting up automated shipping, or building a high-converting store, explore our e-commerce website development services, check out transparent pricing on our pricing page, or contact us to talk directly with our engineering team in Ahmedabad.