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The 7 best Payment Providers for Shopify

Head West Team
Updated February 28, 2024
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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 take

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).

Small stores (<$10M in revenue) should use:

1 - Shopify Payments

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

  • Basic: 2.9% + 30¢ per online transaction
  • Shopify: 2.7% + 30¢ per online transaction
  • Advanced: 2.5% + 30¢ per online transaction
  • Plus: 2.15% + 30¢ per online transaction

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.

2 - PayPal

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

Larger stores ($10M+) should consider adding:

3 - BNPL - Afterpay, Klarna, Shop Pay etc.

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.


Fees vary based on the BNPL provider, but the typical fee is ~6% + 30¢ per transaction

4 - Apple Pay

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 

5 - Google 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

6 - Amazon 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

7 - Venmo

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:

  • Stripe - Offers credit card processing and supports over 135 currencies. Shopify's recommended payment provider.
  • PayPal - Allows customers to pay with their PayPal account. Supports 25 currencies.
  • Amazon Pay - Lets customers pay using their Amazon account.
  • Authorize.Net - Provides credit card processing and fraud prevention tools.
  • Adyen - Supports over 250 payment methods including popular local payment options.
  • Klarna - Enables installment plans, direct payments, etc.
  • Square - Allows in-person and online payments. Has point-of-sale integration.

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:

  • More payment options - Allows customers to pay with credit/debit cards, PayPal, Amazon Pay, etc.
  • Accept payments globally - Most providers support multiple currencies and local payment methods.
  • Reduced liability - Providers handle sensitive financial data.
  • Lower transaction fees - Providers can offer competitive rates compared to Shopify Payments.
  • Advanced features - Includes recurring billing, fraud protection, payment installment plans, etc.

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:

  • Fees and pricing - Compare the transaction, processing, and gateway fees charged by different providers. Look for flat-rate pricing rather than percentage-based fees.
  • Integration - Make sure the provider offers an easy integration with Shopify. Look for providers that offer a Shopify app or Shopify-optimized integration.
  • Accepted payment methods - Consider what types of credit cards, mobile wallets, etc. are accepted. Make sure popular methods like Visa, Mastercard, Amex, PayPal are supported.
  • Security - The provider should use top security measures like SSL encryption and PCI compliance. Make sure sensitive data is protected.
  • Customer support - Find a provider with solid customer service in case any issues arise. Look for 24/7 phone and chat support.
  • Reporting and analytics - The provider should offer detailed reporting on transactions, refunds, chargebacks etc. so you can monitor your sales.
  • Additional features - Consider providers that offer value-added features like customizable checkout, recurring billing, inventory management etc.
  • Reputation - Research reviews and complaints about the provider. Choose an established company with a good track record.
  • Localization - If selling internationally, find a provider that can handle multiple currencies and country-specific payment methods.

How do you accept payments through Shopify?

Here are a few ways to accept payments through Shopify:

  • Shopify Payments - This is Shopify's built-in payment processing system. It allows you to accept credit cards both online and in-person. Shopify Payments charges transaction fees and requires no monthly fees or long-term contracts.
  • External payment gateways - Shopify integrates with many third party payment gateways like PayPal, Stripe, and Authorize.net. You can choose a gateway based on the features you need and fees you're willing to pay. Shopify charges a transaction fee for using external gateways.
  • Shopify POS - The Shopify POS system allows you to accept in-person payments using an iPad or tablet. It supports accepting payments via debit/credit cards, Apple Pay, and Google Pay. Shopify POS charges a monthly fee per location.
  • Manual payments - Shopify lets you accept manual payments like bank deposits, cash on delivery, checks etc. These are marked as pending in Shopify until you confirm they are received.
  • In-person credit card readers - You can use third party hardware like card readers to accept chip and swipe payments in-person. Shopify provides integration with readers like Square and Clover.

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