Payment providers (Shopify Payments, PayPal, etc.)
Understand how payment providers work in Shopify, including Shopify Payments, PayPal, and third-party options — plus the honest truth about transaction fees.
Choosing a payment provider is one of the most important decisions you make when setting up your Shopify store. It affects what fees you pay, which cards you can accept, and how quickly money reaches your bank account.
Quick summary
Shopify Payments is Shopify's own payment processor. It has no extra transaction fee from Shopify and is the simplest option. If you use a third-party provider (like PayPal or Stripe), Shopify charges an additional transaction fee on top of that provider's own fees. The fee ranges from 0.5% to 2% depending on your plan. Use Shopify Payments if it's available in your country.
What is a payment provider?
A payment provider (also called a payment gateway) is the service that processes your customers' card payments. When a customer enters their card number at checkout, the payment provider verifies the card, moves the money, and deposits it in your account.
Shopify gives you a choice of providers. The right one for you depends on your country, your business type, and your priorities.
Shopify Payments
Shopify Payments is Shopify's built-in payment processor. It is powered by Stripe behind the scenes.
Why we recommend it (where available):
- No extra Shopify transaction fee — you only pay the processing fee (the per-transaction percentage charged by the card network)
- Payouts go directly to your bank account on a regular schedule
- Fraud analysis is built in
- Enables Shop Pay, the fast express checkout option
- Enables Apple Pay, Google Pay, and Meta Pay at checkout
- All in one place — you manage everything inside Shopify
Processing fees vary by plan. The higher your Shopify plan, the lower the rate you pay per transaction. Check the current rates on the Shopify pricing page for your country, as they change over time.
Shopify Payments is not available everywhere
Shopify Payments is available in the US, UK, Canada, Australia, and many European countries — but not all. If your country is not supported, you will need to use a third-party provider. Check the Shopify Payments eligibility page for the current list.
Third-party payment providers
If Shopify Payments is not available in your country, or if you have a specific business reason to use another provider, Shopify supports hundreds of third-party options.
Popular choices include:
| Provider | Good for |
|---|---|
| PayPal | Familiar to customers; good for international sales |
| Stripe | Developer-friendly; great international coverage |
| Square | If you also sell in person at a physical location |
| Authorize.net | US businesses needing an established gateway |
| Klarna / Afterpay | Buy-now-pay-later options |
The honest truth about transaction fees
When you use a third-party provider, Shopify charges you an additional transaction fee on every sale — on top of whatever fee the provider charges you.
| Shopify plan | Additional transaction fee |
|---|---|
| Basic | 2% per transaction |
| Shopify | 1% per transaction |
| Advanced | 0.5% per transaction |
| Shopify Plus | 0.15% per transaction |
These fees add up quickly. For example, on the Basic plan with a third-party provider:
- PayPal charges you ~3.49% + $0.49
- Shopify charges you an extra 2%
- Your total cost per sale: ~5.49% + $0.49
This is why we strongly recommend using Shopify Payments wherever it's available. Switching to Shopify Payments removes the Shopify transaction fee entirely.
PayPal Express Checkout
Almost all Shopify stores include PayPal Express Checkout as an additional option. This appears as a PayPal button on the product page and cart, letting customers pay with their PayPal balance or saved card without re-entering details.
Shopify automatically sets up a basic PayPal account for you when you create your store. To receive payments, you need to connect a verified PayPal business account. Go to Settings → Payments and follow the PayPal connection steps.
Connect your PayPal account
If you don't connect your own PayPal account, payments may go to a default email rather than your bank. Check your PayPal connection in Settings → Payments as soon as your store is live.
Shop Pay
Shop Pay is Shopify's express checkout option. It remembers customers' details across all Shopify stores, so returning customers can check out with one tap.
Shop Pay is only available if you use Shopify Payments. Once Shopify Payments is enabled, Shop Pay is on by default.
Buy now, pay later
Shopify supports buy-now-pay-later (BNPL) options like Afterpay, Klarna, and Affirm. These let customers split their purchase into installments. You receive the full amount upfront; the provider handles the installments and the risk.
BNPL options tend to increase average order value. They can be added from Settings → Payments.
Setting up your payment provider
Go to Settings. From your Shopify admin, click Settings in the bottom-left corner.
Click Payments. You will see your current payment provider setup.
Complete Shopify Payments setup (if available). Click Complete account setup and enter your business and banking details. Shopify will verify your identity before activating payouts.
Add PayPal. In the same settings page, connect your PayPal business account if you want to offer it.
Add any other providers from the list of supported gateways if needed.
Test a payment. Use Shopify's test mode or place a real order (then refund it) to confirm payments are working.
Common questions
Related guides
- Understanding the Shopify cart & checkout
- How taxes work in Shopify
- How to refund an order in Shopify
- Shopify plans & billing
- Shopify terms, explained simply
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