How to Accept UPI Payments for Digital Products with Razorpay

UPI is how India pays online — NPCI reported 24.07 billion UPI transactions in September 2026. If you sell ebooks, templates, courses or calls, your checkout has to take UPI, and for most creators that means a payment gateway such as Razorpay. Here's what setting it up involves, what it costs and what to watch for.

1. Create and activate your account

Sign up with Razorpay and complete KYC: PAN, bank account and business details. Individuals and sole proprietors can apply. Until your account is activated you can use test mode, which runs the whole flow — checkout, webhooks, refunds — with test cards and test UPI, no real money.

2. Generate API keys

In the Razorpay dashboard, generate a Key ID and Key Secret (test keys start with rzp_test_, live keys with rzp_live_). The platform you sell from uses them to create orders and open checkout. Treat the secret like a password: paste it only into a platform that stores it encrypted, and regenerate it if it's ever exposed.

3. Set up a webhook

A webhook is Razorpay calling your platform's server to say what happened to a payment. It's what makes delivery reliable when a buyer closes the tab mid-payment or their phone loses signal after paying by UPI.

Each webhook is signed with a secret you choose. The receiving server must verify the signature before trusting the message, and should ignore duplicates (Razorpay retries deliveries).

4. Fees and settlement

GST is charged only on the fee, not on the sale: a 2% fee works out to 2.36% in total. Razorpay also announced an offer for merchants activating on or after 1 July 2026 that waives the platform fee on eligible domestic payments for an initial period — check the current terms when you sign up. Domestic payments settle to your bank on a T+2 working-day cycle by default (T is the day the payment is captured).

5. Refunds

You can refund from the Razorpay dashboard or from your store if it's connected through the API. Either way, the store should remove access to what was refunded — a refund.processed webhook handles that automatically for refunds made in the Razorpay dashboard. Publish a clear refund policy for digital products and follow it consistently.

6. Payments from outside India

International cards are a separate activation. Razorpay asks for complete website policies — About, Contact (with a verifiable address, phone number and email), Shipping/delivery, Refund and cancellation, Terms and Privacy — and may ask for evidence of existing international business such as invoices or FIRA reports. It says it responds within about five working days. Buyers abroad are charged in rupees and their bank converts the amount.

7. Records to keep

• Your store's sales report (order, amount, buyer country, payment ID) — monthly.
• Razorpay settlement reports, to match payments to bank credits.
• e-FIRA/FIRA for every international payment — your CA needs them.
• GST invoices for Razorpay's fees, if you're GST-registered (you can usually claim that GST as input tax credit).