Shopify Payments vs. Paypal – Which one should you use?

Shopify Payments vs. Paypal – Which one should you use?

Shopify Payments vs Stripe. Reading Shopify Payments vs. Paypal – Which one should you use? 3 minutes Next Shopify Success for BedsRUs.


*This article was reviewed in June 2020 and contains up-to-date information.
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You might’ve heard about Shopify Payments lately with it’s recent release in New Zealand.

But what is it exactly?
Could it save you money?
And how does it stack up against the popular Paypal?


Shopify Payments

If you use Shopify Payments you’ll no longer have to pay the 0.5-2% transaction fees!

This means you’ll only be charged 2.4-2.7% + 30c per order for the credit card fee.

Not many payment gateways can provide an overall rate as low as that.



PayPal’s processing fees are based on how much revenue you generate each month.

If you earn under $5k/month then you will be charged a 3.4% + 45c transaction fee on every order.

This is on top of the 0.5-2% + 30c transaction fee Shopify charges.

Meaning you could be charged upto 5.4% + 45c on every order if you’re on the Basic Shopify plan selling less than $5k/month.


Payout Schedule


Shopify Payments

With Shopify Payments you’ll receive payouts every 3 business days.



PayPal usually takes 5-7 business days for your payments to clear.


Chargebacks – Protection & Prevention


Shopify Payments

Chargebacks are easy with Shopify Payments.

This is because Shopify automatically collects evidence for you that supports your case.

Shopify also generates an automatic, customized chargeback response to make your life easier.



PayPal offers Seller Protection for every eligible transaction.

If a customer files a claim your funds will be placed on hold and you will be required to provide PayPal with evidence supporting your case.

PayPal prefer you to use tracked shipping that proves where the item was delivered to.


Integration with Shopify


Shopify Payments

Shopify Payments is Stripe white labeled. Making it as powerful and simple as Stripe.

This means customers checkout via your site, making the whole buying process streamlined.

Whether or not the customer needs to login is based on your checkout settings.



When a customer chooses to pay with PayPal, they are redirected to PayPal’s website.

This process can be confusing for people unfamiliar with PayPal as the first thing they’re asked to do is login.

The option to pay without logging in is at the bottom of the screen, which a lot of people miss.


Fraud – Analysis + Protection


Shopify Payments


With Shopify Payments, you automatically gain access to Shopify’s fraud analysis tools.

These tools are usually only available on Shopify and Advanced plans if you use a different payment provider.



Paypal offers Seller Protection for merchants of all levels.

This service includes real-time data analysis that operates 24/7.


Bonus: Get Even Lower Fees.

When you upgrade from the Basic plan ($29) to the Shopify plan ($79), the credit card processing fees go down from 2.7% + 30c to 2.5% + 30c

Looking to migrate to Shopify, or integrate your store with Shopify Payments or Paypal?