Shopify markets itself as the unified commerce platform - note: commerce, not just ecommerce - and is committed to providing merchants with all of the tools they need to run their business. So it should be no surprise that when merchants choose Shopify, they aren't just choosing an ecommerce platform but a payment provider too.
In this guide, we want to break down everything Shopify merchants need to know about Shopify Payments and the other payment gateways available to Shopify businesses. As a UK Shopify agency, these are questions we're asked by almost every merchant we work with.
What is Shopify Payments?
Shopify Payments is Shopify's native payment processor. Touted as "the simplest way to accept payments online," it eliminates the hassle of setting up a third party payment provider or merchant account and having to enter credentials into Shopify. With Shopify Payments, merchants are set up to accept all major payment methods as soon as their Shopify store is built. In fact, the only thing a merchant needs to do is secure their account with two-factor authentication.
Shopify Payments is available as an online payment gateway in most countries. If you operate a physical store and run Shopify POS, it's worth checking the list of supported countries.
What are the Benefits of Shopify Payments?
Shopify Payments is widely adopted by merchants across all Shopify plans, from small businesses running on Shopify's entry-level basic plan to enterprise merchants using Shopify Commerce components to run their checkout. So why do so many merchants choose Shopify Payments over other payment providers?
Shopify Payments Means No Third-Party Transaction Fees
Plain and simple, if you choose Shopify Payments as your payment provider, there are zero third-party transaction fees. In fact, this is true whether it's an online transaction or other manual transactions like cash, cash on delivery, or bank transfers. Even if a customer chooses PayPal, the payment is exempt from third-party transaction fees.
By contrast, Shopify typically adds an extra charge on every order processed through an external gateway, on top of whatever that provider charges you. The rate depends on your Shopify plan, but on a high-volume store it adds up quickly, so it should always be part of the cost comparison.
Shopify Payments Supports the Payment Methods Your Customers Already Use
Another standard benefit baked into Shopify Payments is the depth of payment methods accepted by default. Shoppers will always have a preferred payment method, whether that's Apple Pay, Google Pay, or Shop Pay (more on that later), and Shopify Payments supports it all.
Shopify Payments also supports the native payment options offered by different countries and regions. Some examples include:
- Klarna: A Swedish buy-now-pay-later service popular in the UK and other European countries.
- Bancontact: A popular bank-based payment method used primarily in Belgium.
- OXXO: A cash voucher system widely used in Mexico.
- GrabPay: A local mobile wallet option for customers in Singapore.
- ACH Direct: A popular direct debit payment service for B2B customers in the US.
...and so many more.
This means fewer "sorry not supported" messages and more customers completing their purchase with ease.
Shopify Payments Gives Merchants Access to Shop Pay
A unique benefit to Shopify Payments is that it gives you access to Shopify's own accelerated checkout, Shop Pay.
So...
What is Shop Pay?
Immediately recognisable with its now iconic purple button, Shopify's accelerated checkout option, Shop Pay, gives customers with a Shop account a completely frictionless checkout experience.
Starting as an extension of the Shop App - Shopify's native order tracking tool that allows shoppers to see the status of their order directly from their phone - Shop Pay allows customers to save their email address, payment method, and shipping and billing information, making the checkout process faster and more convenient.
Shop Pay is only available to merchants using Shopify Payments as their payment processor. Merchants on a third-party gateway can't run it, so this is the first thing to check before planning anything around Shop Pay.
What are the Benefits of Shop Pay?
Shop Pay has become synonymous with Shopify Ecommerce in recent years. So what are the benefits of using it as your accelerated checkout option?
Shop Pay's accelerated checkout consistently outperforms standard guest checkout, and there are three main reasons why.
Shop Pay Removes Friction From the Checkout Experience
A typical guest checkout asks shoppers to complete fifteen to twenty separate fields. Shop Pay collapses all of that into a single authentication step using details that have already been verified. This matters because 18% of US online shoppers who abandon their baskets say the checkout was too long or too complicated. Shop Pay also completes around 2.5 times faster than a guest checkout, which means fewer opportunities for a customer to change their mind.
Shop Pay removes Points of Failure From the Checkout
With Shop Pay, there is no card to find, no digits to mistype, no password to remember and no failed authentication to retry. None of these problems reflect a customer's willingness to buy, but each one gives them a reason to abandon their checkout. Baymard's checkout research found that existing account holders who struggled to sign in abandoned checkout at rates of up to 19%, so removing that step recovers sales that would otherwise be lost.
Shop Pay Transfers Trust to Customers
A benefit unique to Shop Pay compared to other accelerated payment options like Apple Pay or Google Pay is that Shop Pay is a recognised payment wallet, which makes it a useful trust marker for customers who have never shopped with a merchant before. That recognition carries a trust premium of its own, separate from the speed of the checkout. Shoppers are more comfortable handing over their details when they can see a payment method they already know and use elsewhere.
These benefits are even stronger on mobile, where typing out payment details is most frustrating. Tokenised credentials and fewer authentication step-ups amplify all three mechanisms, and stores that properly display express wallets like Shop Pay see a conversion lift of around 12% on mobile regardless of if a customer used the option or not.
Shop Pay Boosts the Entire Buying Funnel, Not Just the Checkout
According to Shopify's own data, Shop Pay improves performance at several points in the buying journey.
The presence of the Shop Pay logo alone - whether displayed on the footer or on the PDP - generates a 5% lift in conversions among shoppers who reach the checkout. Shop Pay can also deliver up to 50% better conversion performance than standard guest checkout, although results will vary from store to store. It converts at a rate more than 10% higher than competing accelerated wallets, which suggests that shoppers respond to Shop Pay specifically rather than to express checkout in general.
Orders placed through Shop Pay also have an average order value that is 15% higher.
Shop Pay also benefits from a large existing audience. With more than 250 million buyers in the Shop network, a good proportion of a merchant's current customers may already have an active Shop Pay account, letting them check out in moments. For more ways to lift checkout performance, see our guide to improving your Shopify store's conversion rate.
Shop Pay is Low Risk to Switch On
Merchants are often nervous about changing their checkout, but enabling Shop Pay carries very little technical risk.
Shop Pay is additive, which means that existing payment methods stay where they are. This is because Shop Pay appears as an extra button in a radio layout rather than as a replacement for Apple Pay or non-accelerated checkout options. Shop Pay is also fully reversible, as the same admin toggle that turns it on will turn it off again, with no data migration or structural changes needed.
For Shopify Plus merchants, setup only involves admin configuration and button placement rather than a checkout rebuild, meaning existing checkout logic, including discounts, shipping rates, taxes and fraud rules, is left completely untouched.
For the best results, merchants should place the Shop Pay button above the fold on product pages so that buyers can see it without scrolling. They should also check that their existing payment contracts do not include any wallet exclusivity restrictions. As a Shopify partner agency, we help merchants audit their stores to make sure Shop Pay is enabled and rendering correctly on product pages, in the cart and at checkout.
Long-Term benefits of Shop Pay
Beyond the short-term conversion gains, Shop Pay also supports retention and growth. Shopify reports that Shop Pay users are 77% more likely to make repeat purchases, which turns an initial conversion gain into lasting customer loyalty. Shop Pay is recognised by a network of more than 250 million buyers, both on online storefronts and in physical retail. Merchants who have Shopify Payments live can also access the Shop app and Shop Campaigns, which offer a pay-per-conversion route to acquiring new customers (availability of Shop Campaigns varies by market).
The Drawbacks of Shopify Payments
Looping back to Shopify Payments, there are some legitimate downsides and hurdles that merchants should consider before implementation.
Shopify Payments Does Not Support Regulated Industries
Despite Shopify proudly showcasing their work with Seth Rogen's brand Houseplant over the past few years, merchants have been frustrated with what they can safely call preferential treatment.
Despite selling in the regulated industry of cannabis-related products, Houseplant has access to Shopify Payments. Typically, Shopify imposes strict restrictions on what can be sold through Shopify Payments, particularly items that could violate payment network regulations or legal laws. This includes a long list of prohibited items, such as adult content, counterfeit goods, and "illegal" services, but spans into some medical services, alcohol, and high-risk categories like knives or weaponry.
And these aren't grey areas either. If you fall into one of these categories, Shopify Payments will either block setup or freeze your payouts without warning. A good Shopify development agency will check your product range against these restrictions before a build begins, because discovering them after launch is far more costly.
Shopify Payments Has Higher Transaction Fees Compared to Some Other Payment Providers
This is one we hear a lot. Shopify's payment processing fee of ~1.5% for stores on Shopify Plus is only negotiable once a merchant is making over £8,000,000 annually. Compared to other payment providers like Stripe or Square, that's a pretty big chunk of cash getting lost to Shopify.
Shopify Payments Can Issue Payout Freezes
This one frustrates a lot of new store owners. Even after verification, Shopify may hold your first few payouts for up to 30 days, especially if:
- You've had chargebacks in the past
- You process a large volume of orders out of nowhere
- You sell products in higher-risk niches
This can cause some real cash flow issues, particularly if you've already spent money on ads or inventory. The platform doesn't always give clear timelines, which adds to the stress.
If you're in a restricted niche or need more flexibility with risk handling and regional support, Stripe or PayPal might still be your best fallback.
Built-In Tools You Get With Shopify Payments
- Currency conversion: Shoppers can see and pay in their local currency, which removes the guesswork and the surprise of a foreign exchange charge at checkout.
- Chargeback handling: Disputes are managed from within your Shopify admin, so you can respond with evidence in one place rather than juggling a bank portal.
- Fraud analysis: Orders are assessed for risk and flagged in your admin, helping you spot suspicious orders before they ship.
- Tax compliance through Avalara: Helps automate tax calculations at checkout, taking pressure off merchants selling across multiple regions.
Final Verdict
For most merchants, Shopify Payments is the simplest and best-integrated way to take payments on Shopify. It removes third-party transaction fees, supports the payment methods customers already use, and unlocks Shop Pay, which has the strongest evidence behind it for lifting conversion and average order value.
The trade-offs are minor, though real: higher processing fees than some competitors, payout holds for new stores, and restrictions on regulated or high-risk products. If you sell in a restricted category or need more flexibility on fees and risk handling, Stripe or PayPal remain sensible fallbacks. The best Shopify agency for your project will weigh your products, markets and margins before recommending a payment setup, rather than defaulting to one provider.
For everyone else, we'd recommend Shopify Payments with Shop Pay switched on.
Want to learn how we implement Shopify Payments for merchants making Shopify migrations? Contact our Shopify Agency team and let's help you make the move.
