Shopify Payments: Complete Guide and Alternatives
Fees by Shopify Plan
Shopify Payments processing rates decrease with each higher-tier Shopify plan. Here is the complete fee structure:
Shopify Starter ($5/month): 5.0% + $0.30 online. This plan is designed for social selling and link-in-bio commerce, not for running a full online store. The 5% rate is expensive, but the $5 monthly fee makes it the cheapest entry point for very low-volume sellers.
Basic Shopify ($39/month): 2.9% + $0.30 online, 2.7% + $0.00 in person. Third-party gateway surcharge: 2.0%. This matches Stripe's standard rate and is the most common starting plan for new store owners.
Shopify ($105/month): 2.6% + $0.30 online, 2.5% + $0.00 in person. Third-party gateway surcharge: 1.0%. The rate reduction saves approximately $30 per $10,000 in monthly sales compared to Basic.
Advanced Shopify ($399/month): 2.4% + $0.30 online, 2.4% + $0.00 in person. Third-party gateway surcharge: 0.6%. The 2.4% rate is one of the lowest flat rates from any major processor. At $50,000 per month in sales, the lower rate saves approximately $250 per month compared to Basic, partially offsetting the higher plan cost.
Shopify Plus ($2,300+/month): Negotiable rates, typically starting around 2.15% + $0.30 online. Third-party gateway surcharge: 0.2%. Plus is for high-volume merchants processing $1 million or more per year.
In-person rates through Shopify POS have no per-transaction fixed fee, which makes Shopify Payments competitive for in-person sales, especially for high volumes of small transactions where the $0.10 to $0.30 fixed fee on other processors adds up.
The Third-Party Gateway Surcharge
This is the single most important reason to use Shopify Payments. When you process payments through any gateway other than Shopify Payments, Shopify adds a surcharge on every transaction: 2% on Basic, 1% on Shopify, and 0.6% on Advanced. This surcharge is on top of whatever your external gateway charges.
Here is what that means in practice for a Basic plan store processing $15,000 per month through Stripe instead of Shopify Payments: Stripe charges 2.9% + $0.30 per transaction ($535) plus Shopify adds 2% surcharge ($300), for a total of $835 per month. With Shopify Payments at the same rate (2.9% + $0.30) and no surcharge, the total is $535. The surcharge costs this store $300 per month, or $3,600 per year, for no additional benefit.
There are very few situations where paying the surcharge to use an external gateway makes financial sense. The math only works if you need a specific gateway that Shopify Payments does not support (a regional processor in a country where Shopify Payments is unavailable), your business is in a category that Shopify Payments does not serve (certain high-risk categories), or you are on Shopify Plus with the 0.2% surcharge and your external gateway offers rates low enough to offset it.
Shop Pay
Shop Pay is Shopify's one-click accelerated checkout, available exclusively to stores using Shopify Payments. When a customer checks out with Shop Pay for the first time, they save their email, shipping address, and payment information. On subsequent purchases at any Shopify store with Shop Pay enabled, they complete checkout in one or two clicks without re-entering anything.
The conversion impact is significant. Shopify reports that Shop Pay has a checkout-to-order rate 1.72 times higher than regular checkout. For mobile shoppers, the improvement is even larger because Shop Pay eliminates the tedious process of typing addresses and card numbers on a small screen. Shop Pay also includes carbon-neutral shipping offsets, order tracking through the Shop app, and Shop Pay Installments (buy now pay later powered by Affirm).
Shop Pay is a competitive advantage that only Shopify merchants have access to. It is one of the most compelling reasons to use Shopify Payments beyond the surcharge avoidance.
Supported Countries and Currencies
Shopify Payments is available in 23 countries: United States, Canada, United Kingdom, Australia, Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Portugal, Romania, Singapore, Spain, Sweden, and Switzerland. If your business is registered in a country not on this list, you cannot use Shopify Payments and must use a third-party gateway (with the surcharge).
Shopify Payments supports multi-currency through Shopify Markets. You can display prices in your customer's local currency, and Shopify handles the conversion at a rate that includes a 1.5% to 2% conversion spread. Customers in supported markets see familiar pricing, which increases conversion in international markets.
Fraud Analysis
Shopify Payments includes built-in fraud analysis powered by Shopify's machine learning models (and the underlying Stripe Radar technology). Every order receives a fraud recommendation: low, medium, or high risk, along with specific indicators that contributed to the risk assessment. Indicators include AVS results, CVV match, IP geolocation versus shipping address, whether the customer has a history of chargebacks, and whether the transaction has characteristics matching known fraud patterns.
The fraud analysis is informational on the Basic and Shopify plans, meaning it flags risky orders but does not automatically cancel them. On Advanced and Plus plans, you can set up Shopify Flow automations that automatically cancel high-risk orders, notify your team for manual review, or add tags for tracking. Third-party fraud apps like NoFraud, Signifyd, and ClearSale integrate with Shopify for stores that need more sophisticated fraud management.
Limitations
Prohibited products and services: Shopify Payments has a detailed list of prohibited businesses and products. These include firearms, ammunition, certain weapons and knives, pharmaceuticals, marijuana and related products (even where legal), certain supplements, adult content, gambling, certain financial services, and multi-level marketing. If your business falls into a prohibited category, you must use a third-party gateway and pay the surcharge. Check Shopify's Acceptable Use Policy for the complete list.
Payout schedule: In the US, Shopify Payments deposits funds on a two-business-day rolling schedule (similar to Stripe). Some countries have longer payout periods (up to seven business days in certain regions). There is no instant payout option through Shopify Payments, unlike Stripe's instant payout feature.
Limited payment processor control: Because Shopify Payments is a managed service, you have less control over payment configuration than you would with a direct Stripe integration. You cannot create custom Stripe Radar rules, access Stripe's full API, or use Stripe's advanced products (Stripe Connect, Stripe Sigma) directly. For most merchants this does not matter, but developers building custom checkout experiences may find the abstraction limiting.
Account stability: Shopify Payments reserves the right to hold funds or terminate accounts for violations of their terms. While less common than PayPal or Square fund holds, it does happen, particularly for businesses that sell products close to the boundary of Shopify's prohibited categories or that experience sudden spikes in chargebacks.
When to Use an Alternative
Despite the surcharge, there are legitimate reasons to use a different gateway on Shopify:
Your country is not supported: If Shopify Payments is not available in your country, you have no choice but to use a third-party gateway. Popular alternatives include PayPal, Stripe (in countries where Stripe is available but Shopify Payments is not), and local payment providers.
Your business is in a prohibited category: If Shopify Payments will not serve your business type, you need a third-party gateway that will. For some prohibited categories, a high-risk merchant account with a compatible gateway (Authorize.net, NMI) is the only option.
You need specific payment methods: If your customers need payment methods that Shopify Payments does not support (specific local payment methods, certain cryptocurrency processors, or specialized B2B payment systems), a third-party gateway that supports those methods may be necessary.
In all other situations, use Shopify Payments. The combination of competitive rates, no surcharge, Shop Pay access, built-in fraud analysis, and unified management within the Shopify dashboard makes it the rational choice for the vast majority of Shopify store owners.