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Platform costs and pricing

Shopify transaction fees in India explained (and when COD avoids them)

How Shopify's 2%, 1% and 0.6% third-party payment fee works for Indian merchants, which orders it applies to, and how to estimate it for your sales mix.

By Orvexa TeamUpdated 3 min read
Shoppers and stalls selling provisions inside Crawford Market, Mumbai
Photo: Dudva, CC0 · All photo credits
Key takeaways
  • In India, Shopify charges 2%, 1% or 0.6% (Basic, Grow, Advanced) on orders paid through a third-party gateway
  • Manual payment methods such as cash on delivery are not charged this fee
  • Your payment mix (prepaid vs COD) changes the fee you actually pay

Shopify's headline plan prices are easy to find. The fee that catches Indian sellers by surprise is the transaction fee, because it scales with your sales.

Which guide do you need? This guide explains one cost: Shopify's fee on each sale. For the full monthly cost of running a store, see What an Indian D2C platform really costs: subscription, fees, GST and apps.

What the fee is

When customers pay through a third-party payment provider such as Razorpay, Shopify charges a percentage of each order on top of the gateway's own fee. On Shopify's India pricing page (checked 7 October 2026), the rate is 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus. Shopify Payments, which avoids this fee in other countries, is not available to merchants in India.

What it applies to

  • Orders paid by UPI, cards and netbanking through a third-party gateway: yes.
  • Orders paid by cash on delivery, bank deposit and other manual payment methods: no, according to Shopify's help centre. The help centre notes one exception, where orders come through some COD apps. Confirm with your app provider.
  • POS orders and draft orders marked as paid with a manual method are also exempt.

So the fee depends on your payment mix, not only on your total sales.

Estimating the fee

Fee = (monthly online-paid sales) × (plan rate).

Example: ₹5 lakh in monthly sales, 70% prepaid. Online-paid sales are ₹3.5 lakh. On Basic, the fee is 2% of ₹3.5 lakh, which is ₹7,000. On Grow it is 1%, which is ₹3,500, but the Grow subscription is ₹7,447 against Basic's ₹1,994 (monthly billing). Basic plus fee is ₹8,994 and Grow plus fee is ₹10,947, so Basic is cheaper at this volume. Move to ₹10 lakh and the two plans cost about the same.

The gateway fee is separate

Razorpay's pricing page lists 2% as its standard rate for domestic payments (plus GST), and your negotiated rate may differ. That fee is paid to the gateway and is charged whichever platform you use. When people say "Shopify costs 4%" they are adding the gateway fee and Shopify's fee together.

How to reduce the fee

  • Move up a plan when the maths says so. Work out the break-even as (Grow subscription minus Basic subscription) divided by (Basic rate minus Grow rate) divided into online sales.
  • Encourage prepaid orders carefully. A small prepaid incentive can reduce COD returns, but it also raises your fee, so check the net effect. See COD vs prepaid.
  • Compare flat-fee platforms. If your online-paid sales are high, a platform with no percentage fee may cost less. Read flat-fee vs revenue-share platforms.

What to do next

Pull last month's report, split orders into prepaid and COD, and calculate the fee on each Shopify plan. Then compare with the full cost picture.

Frequently asked questions

Is the Shopify transaction fee charged on GST?

The fee itself is a charge for a service, and GST may apply on top. Ask your accountant how to treat it, and check your invoices.

Does the fee apply to refunds?

Shopify's help centre states that third-party transaction fees are not returned when you refund an order. Factor that into your return costs.

Do other platforms charge a similar fee?

Some do and some do not. Dukaan charges a service fee on online sales, StoreHippo charges a per-order percentage, and Zoho Commerce and Orvexa charge no percentage on sales. Check each vendor's current page.

Topics:shopifytransaction feesrazorpaycodindia

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