Every Payment Method on Shopify, Explained: Global Options and India-Specific Gateways
Picking a payment gateway is one of those decisions store owners tend to rush through during setup, then live with the consequences of for years. The gateway you choose affects your transaction fees on every single sale, how fast money actually reaches your bank account, which payment methods your customers can use, and β for merchants outside a handful of core markets β whether you can accept Shopify's default processor at all.
This guide covers the full landscape: Shopify's native payment options, the major global alternatives, and a dedicated look at the gateways Indian merchants actually need to use, since Shopify's own processor isn't available there.
Shopify Payments: The Default, Where It's Available
Shopify Payments is Shopify's built-in processor, available in a defined set of countries including the US, UK, Canada, Australia, and much of the EU.
Why it's usually the right default where it's supported:
No separate merchant account or third-party setup required
Avoids the extra transaction fee Shopify charges when you use an external gateway instead
Native integration means fewer moving parts to troubleshoot
Built-in support for major cards, plus Shop Pay, Apple Pay, and Google Pay at checkout
Setup is straightforward: go to Settings > Payments in your Shopify admin, select Shopify Payments, and complete business verification (legal business details, bank account for payouts). Most stores are approved within a few business days.
If you're in a country where Shopify Payments is available, it's almost always the right starting point β you'd need a specific reason (an existing merchant relationship, a feature Shopify Payments doesn't support) to look elsewhere.
Third-Party Gateways for Everyone Else
For merchants in regions Shopify Payments doesn't cover, or who want a specific alternative, Shopify supports well over a hundred third-party payment providers.
PayPal is close to universal β widely trusted, works in most countries, and many customers specifically look for it at checkout even when other options are available.
Stripe is a common choice for merchants who want granular control or are already using Stripe elsewhere in their business.
Regional processors β Mollie in parts of Europe, Payoneer for cross-border sellers, and dozens of country-specific gateways β fill gaps Shopify Payments and PayPal don't cover.
The trade-off to know: using a third-party gateway instead of Shopify Payments means Shopify charges an additional transaction fee on top of whatever the gateway itself charges β the exact percentage depends on your Shopify plan. That's on top of the gateway's own processing fee, so third-party gateways are typically more expensive per transaction than Shopify Payments where Shopify Payments is available.
Digital Wallets and Express Checkout
Regardless of your core gateway, enabling wallet-based express checkout options tends to pay for itself in reduced cart abandonment:
Shop Pay β Shopify's own accelerated checkout, available to Shopify Payments merchants, and generally the fastest checkout experience for returning customers.
Apple Pay and Google Pay β near-universal on mobile, and mobile is where most ecommerce traffic now lands. Skipping these costs conversions specifically on the majority device.
PayPal Express β a one-click option for the large base of customers who already have a PayPal account and prefer not to re-enter card details.
These aren't separate "gateways" so much as faster front doors into whichever underlying processor you're using β worth enabling wherever your primary gateway supports them.
Buy Now, Pay Later (BNPL)
BNPL has moved from a nice-to-have to something a meaningful share of shoppers actively expect at checkout, and its absence causes measurable cart abandonment for stores in markets where it's popular.
Shop Pay Installments β built natively into Shopify Payments, letting customers pay in four interest-free installments or spread payments over several months. No separate app or integration required if you're already on Shopify Payments, and it tends to have strong approval rates.
Klarna and Afterpay β the two dominant third-party BNPL apps on Shopify, each with their own merchant network and approval model. Both install as Shopify apps and typically charge a merchant fee per transaction, higher than standard card processing.
PayPal Pay Later β bundled in automatically if you already have PayPal Commerce Platform connected; rarely worth adding just for this feature alone if you don't already use PayPal.
Practical advice: don't stack every BNPL option at once. Most merchants get the bulk of the benefit from enabling Shop Pay Installments (if on Shopify Payments) plus one additional provider, then measuring the actual impact on conversion and average order value before adding more. BNPL merchant fees run meaningfully higher than standard card fees, so it's worth checking the math on your margins before enabling it broadly, especially on lower-margin products.
Payment Methods in India: Why Shopify Payments Isn't an Option
Here's the detail that catches a lot of first-time Indian Shopify merchants off guard: Shopify Payments is not available in India. This isn't a Shopify limitation so much as a regulatory one β RBI (Reserve Bank of India) rules around payment aggregation and cross-border settlement mean Indian merchants need to use an RBI-regulated third-party payment gateway instead.
That makes gateway selection a more consequential decision for Indian store owners than it is for merchants in markets where Shopify Payments just works out of the box. The main options:
Razorpay
The most commonly recommended gateway for new Indian Shopify stores, and generally considered the easiest to set up. It supports UPI, cards, net banking, wallets, EMI, and cash-on-delivery workflows, with a well-maintained official Shopify app and reliable webhook handling β which matters, since a poorly configured webhook can mean orders that were actually paid don't register correctly in your Shopify admin. Standard domestic transaction fees are around 2%, with international cards typically higher. Settlement is generally T+2 (two business days after the transaction), with faster settlement available on some plans.
PayU
A strong alternative, particularly noted for payment success rates and routing reliability. PayU is worth a look if you've experienced elevated payment failures on another gateway. Domestic fees are broadly comparable to Razorpay, with international transactions typically costing more.
CCAvenue
One of India's longest-established payment gateways, with very broad support for legacy and regional payment methods and strong acceptance among traditional Indian banks. It's a reasonable fit for established retailers, though it typically carries an annual maintenance charge that newer gateways don't, which is worth factoring into your cost comparison.
Cashfree
Worth considering once your monthly transaction volume is substantial β it's often quoted with lower headline transaction fees than Razorpay or PayU, which can meaningfully add up at scale, though it's less commonly the default first choice for smaller new stores.
Setting Up a Gateway on Shopify in India β the Process
Choose your gateway based on your business type and expected transaction mix (see the comparison below).
Install the official app from the Shopify App Store for your chosen provider.
Complete KYC and create a live merchant account with the gateway β this typically requires business registration documents, PAN, and bank account details.
Connect your live API keys in the app's Shopify settings once your account is approved.
Configure webhooks so order status updates flow correctly into Shopify β this step gets skipped more often than it should, and skipping it is a common cause of "paid" orders that don't show as paid in your admin.
Enable the specific payment methods you want customers to see β UPI, cards, net banking, wallets, EMI, cash-on-delivery β since most gateways support all of these but don't necessarily enable them by default.
Run a real test transaction, including a test refund, before going fully live.
Fees and features shift over time on all of these, so treat this as a starting framework rather than a final answer β always confirm current published rates directly with the gateway before committing, since promotional rates and fee structures do change.
Common Payment Setup Mistakes
Only enabling one payment method because it's the default, without checking whether it matches what your actual customer base prefers (UPI dominance in India, for instance, means a store that only accepts cards is leaving conversions on the table).
Skipping webhook configuration on India-specific gateways, leading to orders that are paid but not marked as such in Shopify.
Not testing refunds, only forward payments β refund flow bugs tend to surface at the worst possible time, mid-dispute with a customer.
Choosing a gateway purely on headline fee percentage without accounting for settlement speed, annual maintenance charges, or hidden fees like instant-settlement or chargeback charges.
Enabling every BNPL and wallet option at once without measuring whether each one is actually driving incremental conversions.
Where an Agency Setup Helps β Especially in India
For merchants outside India, choosing a gateway is mostly a matter of confirming eligibility and connecting an account. For Indian merchants, it's a genuinely more involved decision β comparing fee structures, settlement timelines, and payment method coverage across several RBI-regulated gateways, then making sure the integration (webhooks especially) is actually configured correctly rather than technically "connected" but silently dropping order statuses.
This is a routine part of what LassoART Designs handles when setting up Shopify stores for Indian clients β matching the gateway to the business type, making sure UPI, cards, net banking, and COD are configured the way local customers actually expect to pay, and verifying the whole flow end-to-end (including refunds) before a store goes live. It's a small piece of the overall setup, but it's also one of the pieces most likely to quietly cost a store money if it's configured carelessly.
FAQ
Why can't I just use Shopify Payments if I'm based in India? Shopify Payments isn't available in India due to RBI regulations governing payment aggregation and cross-border settlement. Indian merchants need to use a separate RBI-regulated gateway like Razorpay, PayU, or CCAvenue instead.
Which Indian payment gateway has the lowest fees? Headline rates shift over time and vary by volume, but gateways are generally competitive with each other in the 1.75β2% range for domestic transactions, with meaningful differences appearing mainly at high volume or through negotiated custom pricing. Compare current published rates directly with each provider rather than relying on last year's numbers.
Do I need more than one payment gateway? Most stores don't. Running two full gateways adds reconciliation complexity for limited benefit β it's usually better to pick one gateway that covers the payment methods your customers actually use, plus wallet-based express checkout options layered on top.
Is UPI important for an Indian Shopify store? Yes β UPI is one of the most widely used payment methods for Indian ecommerce, and a store that doesn't prominently support it is likely to see lower conversion among Indian customers compared to one that does.
Should I enable BNPL from day one? Not necessarily. It's worth adding once you have a baseline conversion rate to compare against, so you can actually measure whether it's moving the needle for your specific customer base and margins.
The Bottom Line
Payment setup isn't the most exciting part of launching a Shopify store, but it's one of the few settings that touches every single transaction you'll ever process. Outside India, Shopify Payments is almost always the right default. Inside India, the choice between Razorpay, PayU, CCAvenue, and Cashfree deserves real comparison against your specific business type and customer base β not just whichever gateway shows up first in a search. Get it configured correctly once, test it thoroughly, and it becomes one less thing to think about as you focus on actually growing the store.
