Setting up Razorpay on your Shopify store: complete guide

If you are building a Shopify store in India, you cannot use Shopify Payments. It is simply not available here. Razorpay is the most popular alternative for Indian businesses, and for good reason: it supports UPI, all major credit and debit cards, net banking, wallets, and EMI in one integration. This guide walks you through the complete setup.

Why Razorpay for Shopify in India?

Before jumping into the setup, it helps to understand why Razorpay is the preferred choice for Indian Shopify merchants over alternatives like PayU or CCAvenue.

• UPI support: Over 60% of online payments in India now go through UPI. Razorpay handles all major UPI apps including PhonePe, Google Pay, and BHIM.
• No extra transaction fee from Shopify: When you use Razorpay (or any non-Shopify payment provider), Shopify charges a transaction fee of 0.5% to 2% depending on your plan. This is unavoidable, but Razorpay's own processing fee of 2% is among the lowest in India.
• Instant settlement options: Razorpay offers instant payouts (for a small fee) or standard T+2 settlement cycles.
• EMI on cards: One-click EMI on major bank cards, which is important for higher-ticket items like electronics or furniture.
• International cards: Razorpay supports international Visa and Mastercard, useful if you are selling to NRIs or global customers.

What you need before starting

Before you can activate Razorpay on Shopify, have these ready:

• An active Shopify store (any paid plan)
• A registered business in India (proprietorship, partnership, LLP, or private limited company)
• PAN card of the business or proprietor
• Bank account details (the account that will receive settlements)
• GST registration (required for some categories, strongly recommended for all)
• A cancelled cheque or bank statement for KYC

Razorpay's KYC process typically takes 2 to 5 business days for new accounts. You can complete the KYC documentation in the Razorpay dashboard after account creation.

Step 1: create and verify your Razorpay account

Go to razorpay.com and sign up for a new account. Use a business email address, not a personal Gmail. During registration you will be asked for:

• Business category (choose your closest match carefully as it affects settlement timelines)
• Business website URL (your Shopify store URL)
• Expected monthly transaction volume

Once registered, Razorpay gives you access to a test mode immediately. You can generate test API keys and test your payment flow before going live. Do this before connecting to Shopify.

To complete KYC, go to your Razorpay Dashboard, then Account and Settings, then Business Profile. Upload your PAN card, bank account details, and business registration documents. Razorpay's support team typically processes KYC within 2 business days. You will receive an email once your account is activated for live payments.

Step 2: install the Razorpay app on Shopify

Razorpay has an official app on the Shopify App Store. Here is how to install it:

1. Log in to your Shopify admin panel
2. Go to Settings, then Payments
3. Scroll to "Third-party payment providers" or "Alternative payment methods"
4. Search for "Razorpay" in the provider list
5. Click "Activate Razorpay"
6. You will be redirected to the Shopify App Store to install the official Razorpay app
7. Click "Add app" and approve the permissions

Alternatively, search "Razorpay" directly on the Shopify App Store and install from there. Either path leads to the same result.

Step 3: connect your Razorpay keys to Shopify

After installing the app, you need to connect your Razorpay account using API keys. Here is how:

1. Log in to your Razorpay Dashboard
2. Go to Settings, then API Keys
3. Click "Generate Test Key" first (you will use live keys after testing)
4. Copy the Key ID and Key Secret
5. Go back to your Shopify admin, then Settings, then Payments
6. Under the Razorpay section, paste your Key ID and Key Secret
7. Click Save

At this stage, your store is connected to Razorpay in test mode. Before going live, you must switch from test keys to live keys. Live keys are generated the same way in your Razorpay Dashboard after KYC is complete.

Step 4: test the payment flow

Razorpay provides test card numbers and UPI IDs that you can use to simulate purchases in test mode. Add a product to your cart, proceed to checkout, and complete a test payment using:

• Test card: 4111 1111 1111 1111, any future expiry, CVV 123
• Test UPI ID: success@razorpay
• Test net banking: select any bank and use test credentials

Check that the order shows as completed in your Shopify admin. If it does, the integration is working. Now go to your Razorpay Dashboard and verify the test transaction appears there too.

Once testing is complete, go back to Razorpay Dashboard, generate your live API keys, and replace the test keys in your Shopify payment settings. Your store is now ready to accept real payments.

How refunds work with Razorpay on Shopify

When a customer requests a refund through Shopify, you can initiate it from your Shopify admin order page by clicking "Refund". Shopify automatically sends the refund request to Razorpay.

Razorpay processes refunds within 5 to 7 business days. UPI refunds are usually faster (2 to 3 days). The refunded amount returns to the customer's original payment method.

Important: Razorpay does not refund its transaction fees. If a customer pays 1,000 rupees and you refund it, you will receive back 1,000 rupees minus Razorpay's 2% processing fee (20 rupees), so effectively 980 rupees is deducted from your account. Factor this into your refund policy.

You can also initiate refunds directly from the Razorpay Dashboard if needed. Go to Transactions, find the payment, and click "Refund". Both methods sync with each other.

Enabling UPI and EMI options

By default, Razorpay on Shopify enables all supported payment methods: UPI, cards, net banking, and wallets. To enable EMI, you need to enable it in your Razorpay Dashboard.

For EMI:

1. Go to Razorpay Dashboard, then Settings
2. Select "Payment Methods"
3. Toggle on "EMI" under the card section
4. Choose which EMI plans to offer (3 months, 6 months, 9 months, 12 months)
5. EMI is available for orders above 2,000 rupees on most major bank cards

For most product categories, enabling EMI increases average order value. Customers who might hesitate at 15,000 rupees upfront are more likely to complete the purchase at 1,250 rupees per month for 12 months.

Note: EMI is processed by the customer's bank, not Razorpay. Razorpay receives the full amount upfront and your settlement is not affected by the customer's EMI tenure.

Common issues and how to solve them

Payment gateway not appearing at checkout: Go to Shopify admin, then Settings, then Payments. Ensure Razorpay is enabled and no other gateway is set as the primary. Also check that your test or live mode keys are correct.

Transaction declined even with correct card details: In test mode, only Razorpay's official test card numbers work. Real card numbers will always decline in test mode.

Settlement not received: Log in to your Razorpay Dashboard and check your settlement schedule. Most new accounts have a 3 to 5 day holding period. After your first 10 to 15 successful transactions, this typically drops to T+2.

Shopify charging transaction fees: This is unavoidable on Basic and Shopify plans when using third-party gateways. Upgrade to Shopify Advanced (or use Shopify Plus) to reduce or eliminate this fee.

KYC stuck in processing: Contact Razorpay support directly through their dashboard chat. KYC delays are usually due to document clarity or category mismatch.