Payment Gateway and Shipping Setup for Your Ecommerce Store (India 2026)

A Shopify store with beautifully designed product pages and a compelling brand story is operationally useless until two systems are live: a payment gateway (so customers can pay you) and a logistics/shipping setup (so you can deliver what they buy). Both involve their own documentation, fees, and configuration decisions. This guide covers both comprehensively.

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Part 1: Payment Gateways

What a Payment Gateway Does

A payment gateway is the technology layer that securely processes the payment between your customer and your bank account. For Indian ecommerce in 2026, a gateway needs to support:

• UPI (the most widely used payment method in India)
• Credit and debit cards
• Net banking
• Digital wallets (Paytm, PhonePe, etc.)
• EMI (for higher-value products)
• COD order verification (optional but useful)

The Main Options for Indian Shopify Stores

Razorpay is the most popular gateway for Indian D2C brands — widely trusted, excellent developer documentation, and the simplest Shopify integration. Transaction fee: approximately 2% + GST. Supports all major Indian payment methods including UPI, BNPL (Buy Now Pay Later), and international cards.

PayU — strong alternative, particularly for high-volume sellers who negotiate custom rate cards. Transaction fees start at approximately 2% and decrease at scale.

CCAvenue — one of India’s oldest gateways; broadly functional but interface and integration quality lags behind Razorpay and PayU.

Cashfree — growing alternative with competitive rates and excellent API documentation, popular for startups.

Paytm Payment Gateway — useful if your customer base skews toward Paytm wallet users.

Recommendation: Start with Razorpay. It integrates cleanly with Shopify, processes payouts reliably, has excellent fraud protection, and their dashboard makes reconciliation straightforward.

Documents for Payment Gateway KYC

Before you can process live transactions, the gateway requires KYC:

For sole proprietors:

• PAN Card
• Aadhaar or other ID
• GST Certificate (GSTIN)
• Cancelled cheque or bank statement
• Business address proof
• Website URL (your Shopify store must be live or in review mode with product pages visible)

For companies:

• Certificate of Incorporation
• MOA and AOA
• Company PAN
• Directors’ KYC (PAN + Aadhaar)
• GST Certificate
• Board Resolution
• Bank proof

Important: your website must be live (or in review mode with visible products and policy pages) before the gateway approves your account — gateways verify that you’re operating a real business.

Transaction Fees and Payouts

• Razorpay: 2% per transaction + 18% GST on the fee
• Payouts: typically T+1 or T+2 (1–2 business days after settlement)
• Shopify transaction fee: 0.5% (Basic) to 2% (Shopify plan) charged by Shopify for using third-party gateways in India — this is in addition to Razorpay’s fee. Factor both when calculating net proceeds.

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Part 2: Shipping and Logistics

The Logistics Landscape for Indian Ecommerce

Indian ecommerce logistics has multiple layers:

Direct courier accounts: relationships directly with courier companies (Delhivery, BlueDart, Ecom Express, etc.). Requires volume commitments, credit terms setup, and individual account management.

Shipping aggregators (recommended for new sellers): platforms that consolidate multiple courier partners under one interface — you get rate comparison, automated label printing, tracking management, and NDR (Non-Delivery Report) handling without managing multiple courier relationships. Most popular: Shiprocket, Pickrr (acquired by Delhivery), Eshipz, Nimbus Post, Shyplite.

For most new Shopify brands, a shipping aggregator is the right starting point.

How Shipping Aggregators Work

• Integrate your Shopify store with the aggregator (app or API)
• When an order comes in, select the courier and rate in the aggregator dashboard
• Print the shipping label
• Schedule pickup or drop off at a nearby service point
• Aggregator tracks the shipment and updates order status back to Shopify
• Handle NDRs (non-delivery reports) through the aggregator dashboard

Key Shiprocket Setup Steps

1. Create account at shiprocket.in
2. Connect Shopify store (Shiprocket has a native Shopify app)
3. Verify bank account for COD remittance
4. Set up pickup address (your storage location)
5. Select which courier partners to use (Shiprocket integrates with 25+ courier partners — each has different coverage, speed, and cost profiles)
6. Configure COD if applicable (Shiprocket supports COD and remits cash collected to your account weekly)

COD Setup — Still Critical for Indian Ecommerce

Cash on Delivery accounts for a significant share of Indian ecommerce orders — particularly in Tier 2/3 cities and for first-time buyers from unfamiliar brands. Not offering COD means losing a meaningful percentage of potential orders.

COD trade-offs:

• Higher RTO rate (customers who ordered COD are less committed than prepaid buyers — easier to reject delivery)
• COD handling fee charged per order by the logistics partner
• Cash remittance from the courier takes 7–10 days
• Prepaid-only limits your reach significantly in price-sensitive markets

Recommendation: Offer COD from launch, but track COD vs prepaid RTO rates separately. If COD RTO runs above 20–25%, introduce COD confirmation measures (IVR call or WhatsApp message confirming the order before dispatch).