Facebook Community
Change Log
Help Center
Shopify Payments vs. Paypal: What's Best for You in 2025?
Do you know that your payment method could affect how much revenue you earn? Shockingly, it’s the truth, especially for online stores.
You may be surprised that payment options even matter to online customers. However, it is actually a big predictor of your conversion rate. Whether or not your customer likes your payment method or not is one of the most important buying decisions you have to take into account.
The following article will compare the most common payment platforms that are available to Shopify merchants. These popular online payment methods are Shopify Payments vs PayPal.
Shopify Payments Overview
Shopify Payments is a sophisticated, all-in-one payment solution designed specifically for Shopify store. It seamlessly integrates into the system, empowering merchants to accept various payment methods while ensuring secure transactions and efficient financial management. Its user-friendly interface facilitates faster payouts, ultimately enhancing the shopping experience for both customers and sellers.
1. Shopify Payments Pros
As Shopify is one of the leading payment providers, it is not surprising that using the platform comes with multiple pros.
First, if you are a Shopify store owner, as Shopify Payments is an internal feature, the platform can simply integrate into your store in very little time.
Not to mention, by removing the need for a third-party payment platform, Shopify Payments can charge much less than its competitors. Plus, your profits will typically be transferred to your bank account within 3 business days, which is also better than what other competing payment platforms can provide.
Finally, Shopify Payments gives you access to various analytics that will give you a deeper look into your customers and your business. These various analytical and business management solutions that this payment method will provide will give you an overview of your sales, payments, pending payments, and Shopify fees. Having greater insights into your business only means you will be better suited to make future strategic, data-driven business decisions.
2. Shopify Payments Cons
Although there are plenty of pros we could rave about when talking about Shopify Payments, a few cons also need to be mentioned. This big challenge is that customers have to provide sensitive information through your Shopify store website.
Some customers are unwilling to enter their credit cards into a website's checkout form. There are plenty of reasons for this, but the main one is that they don't fully trust online stores and need the security of a third-party platform. So, only using Shopify Payments, which requires direct entry of credit card information, may put a block between you and this type of customer.
The last con that should be mentioned is that to use the Shopify Payments feature you will need to have your website set up with Shopify. Therefore, if you don't already use Shopify or ever want to shift off the platform, you will no longer have access to this payment method.
PayPal Overview
PayPal has been one of the leading online payment platforms for decades, making it a great alternative to Shopify Payments. Shopify store owners may be wondering, “Does Shopify accept PayPal”? Fortunately, the answer is yes, and merchants can easily integrate PayPal with Shopify.
Once added, customers can choose the option “Pay with PayPal” to experience the platform's convenience. Providing this payment choice to your customers may give them an incentive to make a purchase!
1. PayPal Pros
PayPal is, without a doubt, an excellent tool for online business owners with many pros.
First, since the platform has been around for so long, many online shoppers trust it as a method of secure payment. In addition, PayPal has a Seller Protection program and Buyer Protection program, which adds another layer of security to any disputes that may arise in a transaction.
As so many people have been using PayPal for years, they will likely have their payment information saved on the platform. Which decreases the effort the customer has to put in to purchase from your store.
2. PayPal Cons
Since PayPal is a third-party provider, customers will be redirected to a new browser to complete the payment if they choose to purchase through them. This is the biggest downfall of using PayPal, as it disrupts the buying experience and may make customers annoyed or confused.
The high transaction fees that PayPal charges are another unfortunate hurdle as it will overall cut into your bottom line.
Shopify Payments vs PayPal: Which One is Better?
First, let’s take a look at this table for a quick comparison between Shopify Payments vs Paypal:
| Features | Shopify Payments | Paypal |
| Cost and Fees | Varies by plan 2.4% - 2.9% + 30¢ |
In the US: 2.9% + 30¢ Outside the US: 4.4% + fixed fees based on the currency |
| User Experience | Easy to install and use | More complex, time-consuming |
| Payout Schedule | 3 business days | 5-7 business days |
| Dispute Resolution | within 60 days | up to 75 days |
| Customer Support | 24/7 | 24/7 |
As you can see, both Shopify Payments and Paypal have their own benefits and downfall in their use.
However, every business has unique needs that could change our recommendation of using both payment options. You know your business better than we ever could, so use your discretion to make the best decision. Below we laid out how Shopify Payments and PayPal stack up against each other in a few major categories that matter the most to online business
1. Cost and Fees
Shopify Payments Fee
There is no transaction fee for Shopify Payments. If you’re using Shopify Payments in your store to accept credit card payments, you will pay credit card fees for each transaction depending on your plan (2.4% to 2.9% + 30c).
Shopify Payments removes the need for a third-party provider, making it the most cost-effective option.
Shopify PayPal Fees
On the other hand, PayPal is a third-party provider, so fees will be higher compared to internal platforms.
If you’re selling in the US, you’re charged 2.9% of the transaction amount plus a US$ 0.30 flat fee.
When receiving payments from outside of the US, you’re charged 4.4% of the transaction plus a fixed fee based on the currency.
Overall using the Shopify Payment platform is your better option for your budget as it will help you save 0.5% to 2% in transaction fees compared to using PayPal.
2. User Experience
Arguably, the best feature of Shopify Payments is the ease of use and simple integration process. It is essentially as simple as turning on the option to apply the feature to your checkout.
From your Shopify admin:
- Click on "Settings" → "Payment Providers"
- Choose "Shopify Payment setup" to integrate the platform into your checkout.
However, additional information may be needed to set up Shopify Payments, depending on your region. You may need to change your currency settings, add your personal information, or perform other actions.
Nevertheless, the process is streamlined and will be easy to implement! Not to mention, it is a breeze for customers to insert their credit card information and process their orders quickly!
On the other hand, the installation of PayPal is a little more complex and time-consuming. You’ll have to set up a PayPal payment gateway within your website. However, PayPal will redirect your customers to their website to complete the payment. This is not only annoying to your customers but could decrease your overall conversion rate because of the extra added step.
3. Payout Schedule
The processing time for Shopify Payments is relatively quick compared to other payment methods.
On average, the transfer will take 3 business days to be reflected in your account if you are in the US. Shopify Payments is much more efficient compared to PayPal, which requires a 5-7 business day waiting period.
4. Dispute Resolution
When it comes to dispute resolution, Shopify Payments is slightly superior to PayPal. In the case of a dispute, Shopify Payments will perform a thorough investigation by listening to claims on each side and then collecting all the data and evidence necessary to come to a resolution.
If your customer's claim is upheld, a refund will be released, and you will be fined $15 for the investigation. Typically, Shopify Payments will resolve the dispute within 60 days and try to make the processes as smooth and efficient as possible for each party.
In contrast, the PayPal dispute resolution process is less efficient than Shopify Payments. However, that does not mean they have an overall bad dispute procedure. When a claim arises when using PayPal, each party will have 10 days to provide evidence. It will then take up to 75 days for PayPal to make a decision on the issue.
If your customer wins the dispute, PayPal will award them a refund while charging you $20 in chargeback fees. However, the great thing about PayPal is that it has a Seller Protection program which may cover the chargeback fee.
5. Customer Support
Shopify and PayPal have not risen to the top of their industry for no reason. They both offer an essential service that many know and love. In addition, they also both offer high levels of customer support. They both have efficient teams that will respond to your problems within 24 business hours and work quickly to resolve them.
Using a platform with efficient customer support is essential for a business owner. You personally will be thankful for the support when something goes wrong with the payment method on the operational side. However, it will also enable you to respond to your customers quickly, which will give your business the ability to deliver premium customer support.
Learn more:
Shop Pay vs PayPal: What is The Main Difference?
10 Best Shopify Payment Options for Your Business in 2025
The Verdict
Shopify Payments and Paypal are both popular payment gateway solutions for online businesses. The main differences between the two are in their transaction fees, payout schedule, and dispute resolution.
Shopify Payments is a good option for businesses that use the Shopify platform, while Paypal is a more widely accepted option that can be used with most eCommerce platforms.
However, as a Shopify business owner, you do not need to choose between these two.
You can integrate both Shopify Payments and PayPal into your Shopify store.
Giving your customers more payment options will give them fewer roadblocks to clicking the “order now” button and completing the transaction. In addition, it will give them the option that they are most comfortable with, which will only help to build great rapport and relationships.
How to Add PayPal to Shopify?
If you’ve been convinced to connect PayPal to Shopify, you may now be wondering how to connect PayPal to Shopify.
To accept PayPal payments, you’ll first need to set up a Paypal Business Account.
Please note that you need to use the same email address for both PayPal Business and Shopify accounts.
Follow the below steps to link Paypal to Shopify:
Step 1: From your Shopify Admin Dashboard, click on "Settings" → "Payments"
Step 2: In the Supported payment methods section, find PayPal.
Step 3: Click "Manage" → "Complete setup".
Step 4: On the PayPal permissions page, click "I Give Permission".
You’re done! PayPal and Shopify are now integrated.
FAQs about Shopify Payments vs Paypal
