add one more point,
File hosting to be done on websites where razorpay checkout(razorpay iframe) is loading as an overlay on your website. Give illustration. This is required or else applepay payments will not work form such websites. This includes woocommerce, mangento and other website platforms.
However, for the merchant - Shopify, SDK SDK(flutter, native, and react-native), and other razorpay no-code apps(payment links, payment pages, invoices, payment handles etc. will work without any file hosting.
It is important to note if you have both, you would required to host a file.