Shopify Payments vs Stripe vs PayPal on Shopify (2026): Fees and Options

On a Shopify store, "Shopify Payments vs Stripe vs PayPal" isn't a three-way choice between equals. Shopify Payments is Shopify's built-in processor and the default in the countries where it's available. PayPal is usually added alongside it as an extra payment method at checkout. Stripe sits underneath Shopify Payments as one of its technology providers, and connecting your own Stripe account as a separate gateway is a narrower option that brings Shopify's third-party transaction fee with it.

As of October 2026, the lowest-cost setup for most US stores is Shopify Payments as the main processor with PayPal enabled as an additional method. Using another card processor instead of Shopify Payments makes sense mainly when Shopify Payments isn't available in your country, your business type isn't supported, or you have a negotiated processor contract that outweighs Shopify's added fee.

This guide explains how each option works on Shopify, compares US costs and shows where the third-party fee applies. For the full payments picture, see Shopify Payments explained and our Shopify hub.

How each option works on Shopify

Shopify Payments

Shopify Payments is the processor built into Shopify checkout. It's available to businesses in 40 countries, including the US, Canada, the UK, Australia, Japan and most of the EU. It handles cards, Shop Pay, PayPal Wallet and, on eligible stores, USDC stablecoin payments. Payouts, disputes and fees all appear in the Shopify admin. Shopify's 10-K says: "We currently rely on two suppliers to provide the technology we offer through Shopify Payments ... Stripe, Inc. ('Stripe') and PayPal, Inc. ('PayPal')."

PayPal

PayPal is normally offered as an additional payment method next to Shopify Payments, so shoppers who prefer their PayPal balance or account can use it. Shopify's pricing page lists "PayPal Wallet: Starting at 3.49% + 49¢" on all plans, which matches the 3.49% + $0.49 rate for PayPal Checkout on PayPal's US merchant fees page (last updated 1 Oct 2026). PayPal Wallet payments that need currency conversion carry a 3% conversion fee, according to Shopify's international fees page.

Stripe

Stripe offers a payment provider app called Stripe Card Payments for Shopify. Stripe's support center says it "replaces the legacy Stripe payment provider," that merchants had to migrate by 31 Aug 2025, and that you install it from Settings > Payments in the Shopify admin by searching for Stripe Card Payments. Neither Shopify's Help Center nor Stripe's support pages that we checked list the countries where it can be installed, so check your own admin; if it doesn't appear, Stripe suggests requesting an installation link from Stripe Support. When it is available, Stripe's US list rate is 2.9% + 30¢ for domestic cards, and Shopify treats it as a third-party gateway.

Fees compared (US, online)

Sources: Shopify pricing, Stripe pricing and PayPal's merchant fees page, all checked 1 Oct 2026. Stripe's page also lists a 0.5% surcharge for manually entered cards.

The third-party transaction fee

This is the fee that drives most decisions. Shopify's Help Center on third-party providers says: "Third-party transaction fees apply on all third-party and alternate payment gateways even when Shopify Payments is activated. However, if you have Shopify Payments activated, then PayPal and manual payments are excluded from third-party transaction fees."

In practice:

• Shopify Payments, Shop Pay, Shop Pay Installments, PayPal and manual methods: no third-party fee, as long as Shopify Payments is active.
• Any other gateway (Stripe connected directly, other card processors and alternative payment providers): 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus, on top of the processor's own fees.
• Plus stores that use Shopify Payments as their only provider have third-party fees waived.
• Gift cards and store credit: for stores created on or after 12 May 2025, orders paid with store credit or gift cards are charged third-party transaction fees on that amount.

Our Shopify transaction fees guide covers every exemption.

What a $100 order costs

A $100 US order paid with a standard domestic card, using list prices:

At list prices, an outside card gateway costs more on every plan. It can only win if you've negotiated a processor rate low enough to absorb Shopify's fee, which is most realistic on Advanced and Plus where the fee is 0.6% or 0.2%. PayPal costs more per order than cards, but adding it as an option can still pay off if enough shoppers prefer it; test it rather than assume.

Features that depend on Shopify Payments

• Shop Pay Installments (buy now, pay later through Affirm) needs Shopify Payments and Shop Pay, and is available in the US, Canada and the UK.
• Shopify Protect (free fraud chargeback protection on eligible Shop Pay orders) requires a US Shopify Payments account.
• Shopify Balance: payouts from Shopify Payments into Balance can arrive within 1 business day.
• Managed Markets (Global-e as merchant of record) requires Shopify Payments.
• POS Pro on Plus: the POS Pro fee is waived for up to 200 retail locations when Shopify Payments is the primary provider.
• USDC: Stripe announced on 12 Jun 2025 that Shopify merchants "across 34 countries" would be able to accept USDC; Shopify lists USDC at the same rate as standard cards.

See Shop Pay and the Shop app for how accelerated checkout fits in.

When to use something other than Shopify Payments

• Your country isn't supported. Shopify Payments covers 40 countries. Elsewhere, choose from Shopify's list of "over 100 credit card payment providers."
• Shopify Payments can't support your business. If your Shopify Payments application isn't approved for your business, a third-party processor is the alternative.
• You have a negotiated enterprise rate that beats Shopify Payments after adding the third-party fee.
• Operational reasons: a single processor across many sales platforms can simplify reconciliation, though Shopify's fee still applies to orders taken through that gateway.

Recommended setups

Conclusion

For most stores, Shopify Payments is the cheapest and most integrated option, and adding PayPal costs nothing extra in Shopify fees while Shopify Payments is active. Stripe already powers part of Shopify Payments behind the scenes; connecting your own Stripe account is a narrower option that adds Shopify's third-party fee, so it only makes sense when Shopify Payments isn't available or a negotiated rate clearly wins. Check your payment mix and run the numbers above with your own volume. If you want help optimizing checkout and conversion, eSEOspace offers Shopify development services.

Frequently asked questions