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Shopify Payments vs PayPal: Which Is Right for Your Business?

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This article provides a detailed and unbiased comparison between Shopify Payments vs PayPal, two of the most popular payment gateways for online businesses. Ensuring transaction security and a streamlined checkout process is crucial for any business aiming to optimize conversion rates, reduce shopping cart abandonment, and enhance the customer experience. Let's dive in!

What are Shopify payments?

Shopify Payments is Shopify’s default payment gateway that allows users to activate it in the Shopify admin quickly. It is a more straightforward, more convenient, affordable, and secure payment method. Merchants don’t have to install any third-party payment services, and customers can easily make purchases via Shop Pay, credit cards, debit cards, gift cards, Apple Pay, or Amazon Pay.

what is shopify payments

Image Credits: plytix

As a Shopify store owner, you can view and manage data such as orders, payments, and payouts in the Shopify admin dashboard.

Shopify Payments requirements

There are three requirements for merchants to use Shopify Payments. If a merchant is not eligible for Shopify Payment requirements, then they need to add a third-party payment provider.


The payment providers available to your store will vary based on your business location. The first requirement is that your store must operate in supported countries and regions, which are:










Hong Kong SAR





New Zealand







the United Kingdom

The United States

⇒ If your Shopify store's location is not among the above-mentioned countries, you can check the Shopify Payment information by your specific country or region for an overview of what's available. Shopify integrates with over 100 other payment providers worldwide, so don't worry, Shopify has got you covered.

shopify payments device

⇒ If you also own a retail store, then you'll need to activate Shopify Payments in the POS (Point-of-Sale) app as well. Once you have activated it, you can accept credit card payments in person. However, your brick-and-mortar store must also meet the location requirements. You can refer to the list of countries that Shopify Payments supports for retail locations here:










New Zealand



The United Kingdom

The United States


💡Quick note: If you're also operating a brick-and-mortar store, ensure that your Shopify store's country and account currency match those of your physical store's location.

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Business Types & Products

Your type of business and products must be eligible to use Shopify Payments. Shopify provides a list of prohibited products and services, which include regulated, illegal, financial, or adult items. Additionally, pseudo-pharmaceuticals, gambling, and counterfeit products are also ineligible for Shopify Payments.

💡Quick note: Before signing up for Shopify Payments, make sure that your store complies with all applicable laws, regulations, and the terms and conditions of Shopify for your country and industry.


shopify payments security

Security is vital for any payment gateway, as it helps merchants protect customer data, comply with regulations, prevent fraud, and build trust with customers. Therefore, Shopify store owners need to secure their accounts by setting up two-step verification. This process involves two steps:

- Entering your account credentials (your email address and password)

- Authenticating your attempt to log in using a mobile device or a security key  

Even if someone knows your password, they won't be able to access your account without completing the second step. Disabling this feature will expose your account, as well as financial and customer information, to potential criminal attacks.

💡Quick note: If your store isn’t eligible for Shopify Payments, you can add third-party payment providers such as Klarna,, PayPal, or Stripe instead.

Pros and Cons


There are some key features of Shopify Payments that can be beneficial to your online business such as:

- It’s easy to set up and use. Since this is a built-in feature of the Shopify platform, users can integrate this payment method no matter what subscription plan they are in. After successfully signing up to Shopify Payments, you can start accepting payments immediately without delay.

- It’s secure. Shopify Payments is currently one of the leading online payment platforms in the world. They protect your customer’s information during checkout using 128-bit SSL encryption technology. It also helps prevent fraudulent transactions in your store.

- It accepts all primary payment methods. This includes credit cards, debit cards, and PayPal. Customers can quickly complete the checkout process with their preferred payment method.

credit card payment

- It’suser-friendly. It allows customers to purchase orders and pay you directly via their credit cards without redirecting to another tab or page.

- It provides quick processing time. For example, if you register your online store and bank account in the US, you can expect to receive an electronic transfer to reflect in your bank account within 3 business days on average. In the Shopify admin dashboard, you can easily manage all your sales data and even failed payments and refunds.

- 24/7 customer support. You can reach out to Shopify via numerous platforms and channels such as Shopify Community, Shopify Help Center, their live chat, or via email

- No transaction fees. Although this feature removes all the unnecessary use of other third-party payment gateways, you need to pay a standard processing fee for each order. The rate varies based on your Shopify subscription plan.

Shopify Subscription Plan




Monthly (Pay yearly)

$19 USD/mo

$49 USD/mo

$199 USD/mo


2.9% + $0.30 per transaction

2.6% + $0.30 per transaction

2.4% + $0.30 per transaction

Offline (In person)

2.7% per transaction

2.5% per transaction

2.4% per transaction

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Despite all of the feature’s benefits, there are still some drawbacks that are worth noticing for merchants before signing up:

- It has limited availability. As mentioned before, Shopify Payments is not yet available in all countries. Make sure you double-check that you make an informed decision before signing in.

- It has high chargeback rates. If a customer disputes a charge, Shopify Payments will require a higher chargeback fee than some others. You may connect to Shopify to have better and up-to-date insights into this.  

You may want to read: 

How does PayPal Work on Shopify

PayPal is one of the supported payment methods for Shopify. When you open a Shopify store, you will automatically receive a PayPal Express Checkout account, which uses the same email address you use to sign into your store. Once you integrate PayPal into your Shopify account, customers can pay via credit cards, bank accounts, buyer credit, or PayPal account balances.

paypal on shopify

For credit and debit card payments and money transfers, PayPal charges 2.99% plus $0.30 for each transaction. For payments from outside of the US, you need to pay the same domestic fee plus an additional 1.5% of the transaction, and another fixed fee based on the currency.Please keep in mind that the fixed fee depends on the payment’s currency.

If your store is using both Shopify Payments and PayPal as your payment gateways, you only have to pay the fee for the one that your customer uses at the checkout. Next, let’s dive deeper into PayPal's pros and cons.

Pros and Cons


Integrating PayPal into your Shopify store may profit your business in various ways as:

- It builds customers' trust and a sense of safety. It’s undeniable that PayPal is currently the global leader in online payment solutions. It covers customers from checkout to delivery and uses the latest anti-fraud technology to help detect problems even before they happen.

- It’s no need to repeatedly enter financial information. Customers can speed through the checkout process without having to fill in their personal details every time they shop.

- It accepts different currencies. PayPal is available in more than 200 countries/regions in the world and supports 25 currencies. It fills the gap between merchants and global customers.


However, there are some limitations that merchants should consider before activating PayPal on their Shopify store. You can refer to the following list:

paypal cons

- It redirects your customers. They will have to browse away to complete the payment. Extra steps in the checkout process may eventually increase the number of abandoned carts.

- It has a longer payout schedule, which typically takes 5-7 business days for merchants to receive a customer’s electronic transfer.  

- It requires merchants to process refunds through their system. Since PayPal is a third-party provider, it’s impossible for merchants to manage refunds in the Shopify admin.

Shopify Payments vs PayPal: A Comparison

In this table, you can quickly grab the key differences between Shopify Payments vs PayPal. Before deciding on what payment processors or both of them can be the best suited for your online store, it’s important that you are aware of the pros and cons of each.


Shopify Payments


Pricing and Fees

Vary by plans:

2.4% - 2.9% + $0.30 per transaction

- Domestic payments: 1.90% to 3.49% + a fixed fee per transaction

- International payments: The same domestic fee + 1.5% of the transaction + a fixed fee

Customer Experience

Customers can complete the checkout on one page

Customers have to browse away to complete the checkout

Merchant Experience

Easily manage data and payments in the Shopify admin

Merchants have to process refunds through PayPal’s system

Currency & Country Support

Support 23 countries and multiple currencies

Available in more than 200 countries/regions and supports 25 currencies

Customer Service



Processing Time

24h - 3 business days

5 - 7 business days

Refund Processing Time

5-10 business days

PayPal account balance: same-day

Bank account: up to 5 business days

Credit card (including PayPal Credit): up to 5 business days

Debit card: up to 30 days

As a store owner, you have the most accurate insights into your customers, products, key features, and growth potential. The table above shows both the unique functions and limitations of Shopify Payments vs PayPal payment gateway. Some key factors for you to consider include business size, customer base, product range, and geographic regions.

For further suggestions on choosing the right payment gateway for your business, let’s move on to the next section.

Which Payment Method is Best for You

So, in the debate between Shopify Payments vs PayPal, which is the winning payment option for your store? Before deciding, please keep in mind that there is no one-size-fits-all solution. Each of them has pros and cons, and the suitable one depends on your business size, your sales volume, and geographical location as well.

Now, let’s take a look at your business and reflect on what will be your next steps. This section provides you with all the ideas for you to consider.

Make a Customer-first Decision

Some payment providers are only available in certain countries and currencies. Therefore, it’s important that you have an overview of all the countries/regions and currencies supported by the payment provider, and ensure that they align with your target audiences and markets. However, please note that you can always integrate both Shopify Payments and PayPal into your store.

online store payment methods

Before going live, you can test the checkout process first to ensure that it runs smoothly and tackle any possible issues ahead of time. A seamless checkout process encourages customers to complete their orders more promptly, enhances their shopping process, and significantly boosts overall sales.

Transaction Fee

The transaction rates directly affect your product's pricing and profit margins. You can gain more practical insights by calculating the actual rate per transaction, understanding its impact on the product price, and estimating how much you will have to pay the provider monthly.

transection fee

By doing this, you can determine whether you're getting the best profit value from the payment provider. There are other factors that contribute to this, which you may need to account for, such as annual, settlement, chargeback, statement, anticipation, and cancellation fees. Make sure you have run through all of them before making a solid decision.

Ultimately, the goal of choosing the right payment method for your business is to meet your financial requirements while providing a seamless and cost-effective solution.


Create a sense of security and reliability for your customers by ensuring that their personal and financial information is safe with you. It's crucial for businesses of all sizes to have a reliable payment processor.


This processor should provide robust fraud protection and other security features to guarantee the safety of every transaction. Shopify Payments and PayPal are two of the most secure payment gateways, you can rest assured that your business is in good hands with either of them.

Convenience and Ease of Payment

It's not ideal for any business to have an inconvenient checkout process or unfamiliar payment options, as these factors can increase cart abandonment rates. Accordingly, it's important for your Shopify store to offer popular payment methods, such as credit cards, debit cards, and PayPal, without excessive redirects.

Customer Support Quality

Remember that monitoring the checkout process and payment experience are basic daily tasks that you need to keep track of. Get prepared to tackle problems should any issues arise. Thus, responsive customer support from the payment processor and a user-friendly interface will significantly contribute to your day-to-day operations.

Strongly consider payment processors that offer intuitive dashboards, comprehensive and well-organized support documentation, and a proactive support team for both you and your customers.

Setting up Shopify Payments

set up shopify payments

Image Credits: Shopify 

Before you jump in, please keep a few things in mind. Firstly, only the store owner has the authority to make changes to the payment provider. Secondly, the required information varies based on the geographical location of your store. Thirdly, be sure to check the requirements for each supported country before you sign up. Below is a step-by-step guide to help you set up Shopify Payments in your store:

Step 1: From the Shopify admin, go to “Settings” ⇒ Select “Payments

Step 2: Activate your Shopify Payments.

- If you haven’t set up a credit card payment provider on your account yet, then select “Complete account setup” in the “Shopify Payments” section.

- If you have already activated a credit card payment provider before, then select “Activate Shopify Payments”.

Step 3: Fill in the required fields with details about your store and your banking information.

Step 4: Click “Save”.

To accurately complete the setup process, you must enter the first and last name exactly as they appear on your legal government-issued ID. If you use your store name or a nickname instead, you may extend the verification time and may need to submit additional documentation.

💡Quick note: In order to complete this process smoothly, double-check to ensure that your required documents are clear, accurate, valid, up-to-date, and typo-free and that they match the information provided.

Setting up PayPal for Your Shopify Store

set up paypal

Image Credits: Tech Express

Normally, Shopify will create a PayPal Express Checkout account for you using the sign-up email address. If you have already registered the PayPal account with another email address, then you may need to change it to match the one that you use to log into Shopify. If you’re not sure about your registered PayPal email address, then go to “Settings” -> Select “Store details”. In the “Contact Information” section, find “Store email

In case you want to issue refunds, and manually capture or accept payments using PayPal, then you need to give Shopify permission from your PayPal business account. Below is a step-by-step guide to help you set up PayPal in your store:

Step 1: From your Shopify admin dashboard, select “Settings” -> Select “Payments”  

Step 2: In the “Additional payment methods” section, find PayPal

Step 3: Select “Manage” -> Click “Deactivate PayPal Express Checkout” twice to confirm

Step 4: Select “Activate PayPal Express Checkout

Step 5: Enter your email address -> Click Next

Step 6: Enter your password -> Click “Log In

Step 7: Select “I Give Permission” on the PayPal permission page

Step 8: Select “Go back to Shopify” on the PayPal confirmation page

Once you have finished setting up your PayPal account in the Shopify store, customers will need to log into PayPal (or create a PayPal account) to complete payments by default. This may be a bit frustrating to those who don’t have an account. To allow customers to purchase with their credit cards, you need to link your own credit card to the PayPal business account.

However, based on some countries and regions PayPal may have different requirements. Contact the PayPal support team for further information on your specific location.

💡Quick note: Make a test transaction first to ensure that PayPal runs properly and smoothly on your store.


There are several factors that merchants should consider before deciding which payment gateway is most suitable for their business. These factors include the type of business, location, target audience, and specific needs regarding transaction fees, user experience, and international reach. Using both Shopify Payments and PayPal can maximize the range of payment options available to your customer base. Understanding the comparison between Shopify Payments vs PayPal will help you make an informed choice for your business.

Read more: Shopify POS Pricing


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