diff --git a/veza-backend-api/internal/core/marketplace/service.go b/veza-backend-api/internal/core/marketplace/service.go
index b9b582d8b..34a649b81 100644
--- a/veza-backend-api/internal/core/marketplace/service.go
+++ b/veza-backend-api/internal/core/marketplace/service.go
@@ -579,6 +579,14 @@ func (s *Service) ProcessPaymentWebhook(ctx context.Context, payload []byte) err
 		}
 		s.logger.Info("Order failed via Hyperswitch webhook", zap.String("order_id", order.ID.String()), zap.String("payment_id", paymentID))
 		return nil
+	case "cancelled", "canceled":
+		order.Status = "cancelled"
+		order.PaymentStatus = status
+		if err := s.db.WithContext(ctx).Save(&order).Error; err != nil {
+			return err
+		}
+		s.logger.Info("Order cancelled via Hyperswitch webhook", zap.String("order_id", order.ID.String()), zap.String("payment_id", paymentID))
+		return nil
 	default:
 		s.logger.Debug("Hyperswitch webhook: ignoring status", zap.String("status", status), zap.String("payment_id", paymentID))
 		return nil