Have you ever wondered the difference between using Shopify’s payment system and adding a third-party Shopify Payment Gateway? For anyone setting up a Shopify store, choosing the right payment option is a crucial decision that impacts both customer experience and business costs.

Shopify offers its integrated payment solution, known as Shopify Payments, which simplifies transactions and keeps fees low for store owners. However, it’s not the only option—numerous third-party gateways are available, each with unique features and fees.

In this guide, we’ll break down the differences between Shopify Payments and external Shopify Payment Gateways, helping you understand which option will best fit your store’s needs. Let’s find the ideal payment solution for your eCommerce business!

What is Shopify Payments?

Shopify Payments is Shopify’s built-in payment processing solution, designed to streamline payment handling directly within the platform. Unlike third-party payment gateways, Shopify Payments eliminates the need for separate accounts and complex integrations, allowing you to manage all transactions effortlessly from your Shopify dashboard.

With Shopify Payments, store owners can accept major credit cards like Visa, Mastercard, and American Express, as well as other popular options like Apple Pay and Google Pay. This integrated system reduces transaction fees since Shopify does not charge additional fees for processing payments through Shopify Payments (standard credit card fees still apply). However, Shopify Payments is only available in select countries, so merchants outside these regions may need to rely on third-party Shopify Payment Gateways.

What is a Shopify Payment Gateway?

A Shopify Payment Gateway is a third-party service that processes transactions between your Shopify store and your customers’ banks. Unlike Shopify Payments, which is integrated directly within Shopify, these gateways are external providers like PayPal, Stripe, or Authorize.Net, which you can connect to your store. Shopify supports a wide range of these gateways, allowing store owners to choose the one that best fits their business and geographic needs.

Using a third-party payment gateway provides flexibility, especially for merchants outside regions supported by Shopify Payments or those wanting additional payment options. However, third-party gateways often come with added transaction fees and may involve a more complex setup. They can be a great option for businesses looking for more payment customization or support for specific currencies and regions.

Key Differences Between Shopify Payments and Shopify Payment Gateway

When setting up your Shopify store, it’s vital to choose a payment solution that aligns with your business needs. Shopify Payments and third-party Shopify Payment Gateways each offer unique benefits and limitations. The following are their primary differences:

Integration

Shopify Payments is fully integrated within the Shopify platform, meaning you can manage payments directly from your dashboard with minimal setup. In contrast, third-party gateways require creating separate accounts, manual integration, and possibly additional plugins or extensions.

Transaction Fees

Shopify Payments generally has lower transaction fees, and Shopify doesn’t add extra charges for using this option. However, with third-party gateways, Shopify charges an additional fee per transaction, which can add up, especially for smaller businesses.

Payment Options

While Shopify Payments covers major credit cards and local payment options, third-party gateways offer a broader range of payment methods. This can be useful if your Shopify Store Setup involves catering to a diverse, international customer base needing multiple currency options.

Customer Experience

Shopify Payments ensures a smooth, on-site checkout experience, allowing customers to complete their purchases without leaving your store. Third-party gateways, however, may redirect customers to external pages to finish payments, which can add extra steps and may slightly disrupt the shopping experience.

Which Option Is Best for Your Shopify Store?

Choosing between Shopify Payments and a third-party Shopify Payment Gateway depends largely on your business needs, target market, and location. Here’s a breakdown to help you decide which option may work best for your Shopify store setup:

Use Shopify Payments if…

Shopify Payments is the ideal choice for stores based in regions where it’s supported, such as the U.S., Canada, and the UK. It offers easy integration, lower transaction fees, and a seamless checkout experience directly within your store. If you’re looking for simplicity, lower costs, and faster setup, Shopify Payments is often the best option.

Use a Third-Party Payment Gateway if…

If your Shopify store serves an international customer base or operates in regions where Shopify Payments isn’t available, a third-party payment gateway may be the way to go. These gateways offer greater flexibility with currencies and payment methods, catering to diverse markets. They’re also beneficial for stores needing highly customizable payment setups or niche payment methods beyond what Shopify Payments supports.

Consider a Combination

For some businesses, combining Shopify Payments with third-party gateways can provide a more comprehensive payment solution. This setup allows you to take advantage of Shopify Payments’ lower fees while offering additional local payment options for international customers.

Conclusion

Choosing the right payment solution for your Shopify store can significantly impact your business’s success and customer experience. Whether you opt for the simplicity of Shopify Payments or the flexibility of a third-party Shopify Payment Gateway, the choice should align with your store’s location, customer preferences, and expansion plans.

If you’re planning Shopify Migrations or expanding into new markets, carefully assess each option to ensure smooth payment processing and compatibility with regional currencies. Shopify Payments offers a seamless, cost-effective choice for supported regions, while third-party gateways provide versatility for stores with a global reach. Ultimately, understanding these options can help you craft a checkout experience that’s both efficient and convenient for your customers.