Looking for the best Shopify payment provider? Great - in this guide, we'll break our top 7 picks for payment providers / gateways and share our thoughts on who should be using each.
Our advice for payment providers mirrors our advice for almost all eCommerce tech: keep it simple. Small stores should be especially wary of trying to add every payment provider under the sun. It will add complexity to your business and the added benefit will be relatively minor. As your store scales then it makes sense to add payment options. Our advice for larger stores is to try to meet the customer where they’re at aka offer the payment gateway that your customers’ want to use. This will be somewhat specific to each brand, but the payment providers below are the ones we would recommend for most brands. The list is somewhat specific to the US, and you will probably want to tailor your payment options if / when you expand internationally.
Small stores (less than $10M in revenue): keep it simple
Larger stores ($10M+ in revenue): meet the customer where they’re at
The good news is that none of the payment providers listed below charge setup fees or monthly fees outside of the transaction fees (% of transaction).
Shopify Payments is the default option, and we think it’s great for most merchants. Can you find a cheaper payment processing alternative? Maybe, but it will require more brain damage and the handful of basis points you may save will not be worth it when the store is doing less than $10M in sales per year. Plus alternative payment gateways will not be as seamless as Shopify Payments, and you risk hurting your website’s conversion rate with a less than seamless checkout experience. We view small stores trying to save money with alternative payment gateways as picking up pennies in front of a bulldozer. Just use Shopify Payments.
Shopify Payments Fees
Shopify payments fees will depend on which Shopify plan you are on
Note the above rates are for standard cards (domestic consumer cards e.g., Visa, Mastercard, and Discover consumer cards). Fees on corporate cards and American Express will be higher.
Additional fees for chargebacks ($15 / chargeback but refunded if resolved in your favor) and cross-border transactions.
Once stores have added Shopify payments, the next payment processor we recommend adding is PayPal. This will be called PayPal Express Checkout. PayPal is one of the oldest payment processors and has gained the trust of many customers especially with their buyer protection program. There are still people who are afraid to shop online and some of those customers will be more comfortable checking out with PayPal because of their brand name and buyer protection program, so we recommend adding it for them.
In conversations with store owners PayPal is the most popular checkout option behind Shopify payments and typically makes up 20-40% of all transactions.
PayPal will be a more expensive option than Shopify payments, but we think the benefit of converting customers who might not otherwise be comfortable checking out outweighs the cost in this case. One thing to watch out for is your chargeback rate which we have heard from merchants will be higher on PayPal than other payment gateways. The other issue with PayPal is that they occasionally hold onto funds for merchants that they deem as higher risk. It’s a bit of a black box how they determine this, and it’s a painful experience for those in the PayPal penalty box.
PayPal Fees
2.9% + 30¢ per online transaction
Chargeback fee of $20 per dispute
Once stores have both Shopify Payments and Paypal, then we recommend adding a buy now pay later (BNPL) option like Afterpay or Shopify’s Shop Pay product. Stay tuned for a full guide on this category, but our quick recommendation is to just use Shop Pay. Pricing is relatively similar across the BNPLs and Shop Pay will have the easiest integration with Shopify since it's made by Shopify.
The benefit of these products is that they allow customers to finance purchases in an interest free way. The payment processor takes on all of the credit risk of these customers, but they will charge a higher fee than the standard payment processing options (typically ~6% + 30¢ per transaction). Stores that we have worked with that have added a BNPL option have seen an 8% lift in conversion rates and a bump to AOV. Stores with higher AOVs will especially benefit from adding a BNPL option because customers are more likely to want to spread those larger payments over time. Since the customer is deferring the payment they are also more likely to spend more.
BNPL Fees
Fees vary based on the BNPL provider, but the typical fee is ~6% + 30¢ per transaction
Apple Pay is Apple’s native payment processor and is the default payment method for many who use iPhones. They have already entered their payment details and shipping info with Apple Pay so this makes checking out for those customers easier. Shopify wont charge you any additional fees for using Apple Pay and it’s painless to install. In order to use Apple pay, you must have SSL activated on your store domain (which we recommend all stores have). We've also heard from conversations with merchants that Apple Pay customers tend to have higher AOVs, and you tend to see fewer chargebacks with Apple Pay customers. This makes sense because Apple Pay customers have enough disposable income to spend $1k+ on a cell phone.
Apple Pay Fees
Shopify will charge their standard processing fees (2.15 - 2.9% + 30¢ per transaction) but wont charge additional fees for customers that checkout using Apple Pay
Google Pay is the Apple Pay equivalent for Android users. Like Apple Pay, it will make checking out for those using Android phones a breeze. Similar to Apple Apple Pay, Shopify won’t charge any additional fees for customers using Google Pay.
Google Pay Fees
Shopify will charge their standard processing fees (2.15 - 2.9% + 30¢ per transaction) but wont charge additional fees for customers that checkout using Google Pay
Amazon Pay is Amazon’s payment gateway. Amazon has millions of customers and by offering Amazon Pay on your site it will make it easier for those customers to checkout. Note this is separate from Amazon’s Buy with Prime offering that they made available to Shopify stores in late 2023. Similar to Apple and Google Pay, Shopify won’t charge additional fees for customers using Amazon Pay.
Amazon Pay Fees
Shopify will charge their standard processing fees (2.15 - 2.9% + 30¢ per transaction) but wont charge additional fees for customers that checkout using Amazon Pay
$20 plus tax for disputed chargebacks
The last payment processor that we think stores should consider adding is Venmo. Venmo is popular among younger generations who are used to paying their friends on the platform and are beginning to pay merchants on the platform as well. In order to use Venmo as a checkout option you must have PayPal enabled as a payment gateway on your store. Venmo is currently only available to customers shopping in the US.
Venmo Fees
Venmo fees are the same as PayPal’s payment processing fees: 3.49% + $.49 per US transaction
What is a third-party payment provider on Shopify?
A third-party payment provider on Shopify is an external company that handles payment processing for Shopify stores. Some common third-party payment providers used with Shopify include:
What are the benefits of a third-party payment provider for Shopify?
The main benefits of using a third-party payment provider on Shopify are:
What criteria should you consider when choosing a payment provider for Shopify?
Here are some key criteria to consider when choosing a payment provider for Shopify:
How do you accept payments through Shopify?
Here are a few ways to accept payments through Shopify:
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