In May 2025 alone, Indian businesses processed over 18.6 billion transactions, with a total value crossing ₹25.14 lakh crore, as reported by NPCI. Since most consumers are shifting to such faster and secure payment modes, to stay relevant, stores need to offer payment methods that feel native to the Indian user.
That’s why many merchants, especially those using platforms like Shopify, are integrating a payment gateway in Shopify setups to handle this surge in digital transactions smoothly.
For merchants on Shopify, ignoring this shift means overlooking a significant portion of customers.
Let’s break down how to set up UPI and wallets as a payment gateway in Shopify, and what it means for improving conversions, retention, and trust with Indian online shoppers.
The evolution of the payment gateway in Shopify for India
Shopify’s growth in India hasn’t been seamless. While it offers a sleek, global-first platform, Indian merchants face friction that’s hard to ignore.
Shopify Payments isn’t available in India, forcing sellers to rely on third-party gateways. That often means longer checkout times, clunky redirects, and higher drop-offs, especially with UPI-first buyers.
Some of the other key limitations include:
- No native support for Cash on Delivery, which still accounts for a chunk of Indian orders.
- Restricted URL customization, which makes SEO and marketing tweaks harder.
- Content management limitations, especially when trying to localize store pages.
- Difficulty managing large catalogs, which slows down both admin work and customer experience.
At the same time, Indian shoppers are moving fast. Card-based checkouts have taken a back seat as apps like PhonePe, Google Pay, Paytm, and BHIM have taken dominance. The ecosystem has shifted, but Shopify hasn’t kept pace.
This mismatch has created one clear gap: the need for a merchant payment gateway in Shopify that feels built for India, not bolted on after the fact.
Why UPI and Wallets are a must-have for Shopify stores in India
Checkout is the make-or-break moment for any business. In India, that moment looks very different from the global norm. Shopify merchants who stick to traditional methods are missing the payment flow most Indians now default to.
- UPI is the default: It now powers over 75% of India’s online payments. It’s fast, familiar, and deeply embedded into daily spending.
- Wallets add incentive: Platforms like Paytm and PhonePe offer cashback, scratch cards, and loyalty perks.
- Speed is the expectation: Indian buyers are used to tapping once and seeing an order confirmed. UPI and wallets reduce steps and kill wait times.
- Conversions follow convenience: Giving people the payment methods they trust translates into fewer abandoned carts, faster checkouts, and higher order success rates.
Integration process for Shopify stores
Setting up Shopify UPI integration and wallet payments is straightforward if you know where to start. Most gateways now offer plug-and-play support tailored for Indian stores. Here’s how to get it done:
Step 1: Create a merchant account with a payment gateway in Shopify
Sign up with providers like Razorpay, Cashfree, PayU, or CCAvenue. Choose based on transaction fees, wallet compatibility, and support for UPI.
Some platforms like Pine Labs also bundle in loyalty and Pay Later features, which can be useful if you’re planning to scale.
Step 2: Access API keys and SDKs via the dashboard
Once your account is approved, log in to the merchant dashboard. You’ll find API keys, webhooks, and SDK links under the integration section. These are what connect your Shopify store to the gateway.
Step 3: Use pre-built plugins or custom scripts for Shopify
Some gateways offer Shopify plugins, which cut dev time. For custom workflows (like triggering loyalty rewards), you can drop their scripts into the Shopify theme editor using Liquid or Script Editor.
Step 4: Test payment flows in sandbox mode
Run test payments using sandbox credentials. Simulate UPI and wallet flows to make sure order confirmation, payment capture, and failure handling work as expected.
Step 5: Go live with UPI + Wallet-enabled checkout
Switch from sandbox to live mode, update your API keys, and do one final payment test. Once live, your customers will see UPI and wallet options alongside cards and net banking.
You’ll also find that most providers offer detailed documentation, support for Shopify-specific cases, and developer help desks if anything breaks during setup.
Shopify categories that benefit most from UPI & Wallet payments
Not every category sees the same returns from payment upgrades. But for some, offering UPI and wallets directly impacts conversion, AOV, and customer loyalty. Here are the apparent benefits of the same for different businesses:
- Fashion & apparel: Shoppers here tend to be younger, mobile-first, and impulsive. UPI maintains a fast checkout flow, while wallet integration adds flexibility during sales, limited drops, or size exchanges.
- Electronics & gadgets: High-ticket orders often hinge on deals. Wallet cashback, BNPL via UPI AutoPay, and EMI options influence purchase decisions, particularly when buyers compare price and convenience across platforms.
- Personal care & wellness: This category depends on frequency. From serums to supplements, people reorder often. UPI makes repeat purchases seamless, eliminating login hassles and card entry fatigue.
- Homegrown D2C brands: These brands win on cultural connection and offer local payment modes like UPI and Paytm. This signals that you get the market, which builds trust, especially in Tier 2 and 3 cities.
Common challenges and how to overcome them
Even with the right tools, setting up UPI and wallets in Shopify comes with friction. Here’s what usually breaks, and how smart merchants can work around it:
1. Checkout lag due to poor UPI routing or OTP delays
Some gateways route UPI through slower backend systems, causing noticeable checkout lag. If customers wait more than a few seconds for a confirmation, they’ll drop. Choose providers that offer UPI AutoPay or real-time validation. Pine Labs and a few others optimize this out of the box.
2. Fraud risk with non-compliant wallet flows
If the wallet experience isn’t aligned with RBI-compliant flows, payments can fail or trigger disputes. Stick to partners who update wallet SDKs regularly and avoid hardcoding older versions.
Example: Wallet-based refunds that never arrive erode brand trust instantly.
3. Integration fatigue with too many third-party tools
Stacking plugins for payments, rewards, and loyalty can slow down store performance. Use gateways that bundle these tools together to avoid bloat. A cleaner setup also means fewer points of failure during updates or peak load times.
📌 Visual Aid Idea: Checklist: “What to look for in a Shopify-ready payment gateway in India”
Power Shopify growth with smarter payments
For Indian Shopify stores, relying on global payment defaults isn’t sustainable. Checkout flows designed for US or EU buyers fall short in a market where UPI rules and wallets drive decisions. To scale, merchants need payments that feel local, work fast, and offer flexibility at every step—from cashback to Pay Later.
Platforms like Pine Labs Online Payment Gateway combine UPI, wallets, EMI, and loyalty tools into one setup, built with Indian buying behavior in mind.
✅ Want to make your Shopify store payment-ready for India?
Get started with Pine Labs and build a checkout flow your customers won’t bounce from.
FAQs
1. What is the best payment gateway in Shopify for Indian merchants?
The best payment gateways in Shopify for Indian merchantsare Razorpay, Pine Labs, PayU, and Cashfree. Each supports UPI and wallets for smooth checkout experiences in India.
2. Can I integrate UPI with my Shopify store?
Yes, UPI can be integrated using third-party payment gateways. Many now offer plug-and-play modules for Shopify.
3. Does Shopify support Indian wallets like Paytm and PhonePe?
No, Shopify does not directly support Indian wallets like PayTm and PhonePe. But you can enable them through payment gateways like Pine Labs or Razorpay that support wallet integrations.