Does Shopify Only Use PayPal? Payment Options Explained

Introduction

Shopify does not only use PayPal; in fact, it supports a vast ecosystem of payment gateways, local payment methods, and digital wallets. While PayPal is often activated by default when you open a new store, it is just one of hundreds of ways you can accept money from your customers. Modern e-commerce requires a more nuanced approach than relying on a single provider, as different regions and customer segments have distinct payment preferences.

Managing these diverse options effectively is where tools like HidePay become essential for growing brands. We built this app to give you granular control over your checkout experience, allowing you to show the right payment method to the right customer at the right time. Learn more about HidePay on the Shopify App Store.

This guide explains the full spectrum of payment options available on the Shopify platform, how fees differ between them, and how you can strategically organize your checkout to maximize conversions. You will learn how to move beyond default settings to create a checkout that protects your margins and serves your global audience.

The Short Answer: Shopify’s Multi-Gateway Infrastructure

Shopify is built to be payment-agnostic. While the platform has a strategic partnership with PayPal that makes it a "default" option, the software is designed to integrate with a wide variety of financial services. Merchants can choose from several categories of payment processing:

• Shopify Payments: The platform's own integrated gateway (powered by Stripe in many regions).
• Third-Party Gateways: External processors like Authorize.net, 2Checkout, or Worldpay.
• Digital Wallets: Express options such as Apple Pay, Google Pay, and Amazon Pay.
• Alternative Payment Methods (APMs): Region-specific options like iDEAL in the Netherlands or Klarna and Afterpay for "Buy Now, Pay Later" (BNPL) services.
• Manual Payments: Options like Cash on Delivery (COD), bank transfers, or money orders.

You are not restricted to one choice. Most successful stores use a combination of Shopify Payments (for credit cards) and several secondary options to ensure no customer is turned away due to a lack of payment flexibility.

Understanding Shopify Payments vs. PayPal

For most merchants, the primary choice is between using Shopify Payments, PayPal, or both. These two options dominate the Shopify ecosystem but function differently behind the scenes.

Shopify Payments

Shopify Payments is the native solution. It allows you to manage your orders and finances in one place without logging into a third-party site to view transactions. The biggest advantage of using this native gateway is the removal of "additional transaction fees." If you use an external gateway alone, Shopify charges an extra fee (ranging from 0.5% to 2% depending on your plan) on every sale. Using Shopify Payments waives this cost.

PayPal on Shopify

PayPal is an "external" gateway even though it is deeply integrated. When a customer chooses PayPal, they are often redirected to PayPal’s interface to complete the transaction. While PayPal is highly trusted and can improve conversion rates for customers who prefer not to enter credit card details manually, it does not count as "Shopify Payments." Consequently, if you use PayPal without having Shopify Payments active, you may be subject to those additional transaction fees.

Why PayPal Appears as the Default

When you start a Shopify store, the platform automatically creates a "PayPal Express Checkout" account linked to the email address you used to sign up. This is done to ensure you can start making sales immediately. However, this account is only a "placeholder" until you complete the setup. To actually withdraw your funds, you must finish the registration or link an existing PayPal Business account.

Many merchants mistake this automatic setup for a requirement. It is not. You can deactivate PayPal at any time in your Shopify admin settings if it does not fit your business model or if the transaction fees are too high for your specific product category. If you want to hide the PayPal Express button in checkout, our help doc explains the available options and caveats.

Expanding Beyond the Basics: Third-Party Gateways

If Shopify Payments is not available in your country, or if you operate in a "high-risk" industry that Shopify’s internal processor does not support, you will need a third-party gateway. There are over 100 providers globally that integrate with the platform.

Choosing an External Processor

External processors often provide specialized services. For example, some gateways specialize in high-volume B2B transactions, while others offer better rates for specific geographic regions like Southeast Asia or Latin America. When using these, you should account for the "layered fee" structure: the processor’s fee plus the Shopify transaction fee.

Local Payment Preferences

The "PayPal only" mindset can hurt your international growth. In many markets, PayPal is not the dominant player.

• Netherlands: iDEAL is the standard.
• Germany: Sofort and bank transfers are highly popular.
• Brazil: Boleto Bancário is a critical requirement for reaching the full market.
• China: Alipay and WeChat Pay are essential.

By integrating these through specialized gateways or Shopify’s own local payment support, you provide a localized experience that builds trust. For guidance on organizing payment methods by country or Shopify Market, see our step-by-step help article.

The Cost of Payment Flexibility

While offering more ways to pay generally increases conversion, it also introduces complexity in fees. You must balance the customer’s convenience against your bottom line.

1. Standard Processing Fees: Usually a percentage plus a flat cent fee (e.g., 2.9% + $0.30).
2. Additional Transaction Fees: Only applicable if you do not use Shopify Payments.
3. Currency Conversion Fees: If you sell in multiple currencies, gateways often charge 1.5% to 2% to convert funds back to your payout currency.
4. Chargeback Fees: Most processors charge a flat fee (often $15–$25) if a customer disputes a charge.

Strategically Managing Your Checkout with Rules

Simply enabling every payment method available is rarely the best strategy. A cluttered checkout leads to "analysis paralysis," where a customer becomes overwhelmed by choices and abandons their cart. This is where strategic management of your payment list becomes a competitive advantage.

Using our tool, you can apply logic to your checkout that Shopify does not provide out of the box. Instead of showing every option to every person, you can use specific conditions to refine the list — start by learning how to create a payment customization in HidePay.

Geography-Based Rules

If you find that certain payment methods have high fraud rates in specific countries, you can hide those options for customers in those regions. Conversely, you can ensure that a local method like iDEAL only appears for customers in the Netherlands, keeping the checkout clean for everyone else. For a guided setup, our country/market organizer doc walks through creating country-specific maps.

Order Total Conditions

Some payment methods have high flat-fee components that eat into margins on small orders. You can create a rule to hide those options for carts below a certain dollar amount. For very large orders, you might want to hide credit cards and PayPal entirely to avoid high percentage-based fees, instead showing only "Bank Wire" to your B2B or high-ticket customers.

Product-Type Filtering

If you sell a mix of physical goods and digital downloads, your payment needs change. For digital goods, where the risk of "friendly fraud" or instant chargebacks is higher, you might choose to hide certain express buttons. If you sell restricted items that some processors won't cover, you can hide those gateways only when those specific items are in the cart. See our FAQ on hiding payment methods for certain products for steps.

Sorting and Renaming for Better UX

The order in which payment methods appear significantly impacts which one the customer chooses. Most shoppers select the first or second option they see. If your most profitable gateway is hidden at the bottom of a list of six options, you are losing money on every transaction.

We allow you to reorder your payment list. By moving Shopify Payments to the top and pushing higher-fee options like PayPal or BNPL lower, you guide the customer toward the choice that is best for your business. For the exact drag-and-drop steps and renaming controls, consult our guide on sorting and renaming payment methods.

Additionally, renaming options can provide much-needed clarity. Instead of a generic "Alternative Payment Provider" label, you can rename a gateway to something your customers recognize and trust, such as "Secure Credit Card Checkout" or "Local Bank Transfer."

The Technical Advantage of Shopify Functions

The way payment methods are customized on Shopify has changed. Previously, merchants had to use "Shopify Scripts," which required complex coding and was only available to Shopify Plus users. Today, we utilize native Shopify Functions.

This shift is important for your store's performance. Because our app runs on native infrastructure, the logic for hiding or renaming payment methods happens during the initial checkout load. There is no "flicker" where an option appears and then disappears, and there is no external script slowing down your page speed. For more on why Functions matter and how they replace Scripts, read our blog post explaining why Shopify Functions are the future.

If you want to create or migrate Functions yourself (or generate them without code), consider SupaEasy on the Shopify App Store, which helps merchants generate and manage Shopify Functions.

Protecting Your Margins from High Fees

Every payment method has a different cost profile. Cash on Delivery (COD) is a prime example. While essential in some markets, it often results in higher return rates and administrative overhead.

Rather than disabling COD entirely and losing those sales, you can use logic to mitigate risk. For instance, you could hide COD if a customer has a specific tag indicating they have returned items before, or only show it for orders within a certain zip code where your delivery partners are most reliable. To see how merchants pair payment rules with shipping controls, review the HideShip app on the Shopify App Store.

Action Plan for Your Payment Setup

To move beyond a basic PayPal setup and optimize your checkout, follow these steps:

• Audit your current fees: Look at your last month of transactions and calculate the effective rate you paid for PayPal versus Shopify Payments.
• Check regional availability: If you sell internationally, identify the top three local payment methods for your biggest markets.
• Install HidePay: install HidePay and begin organizing your checkout.
• Test by segment: Monitor your conversion rate after hiding a high-fee method for a specific low-margin product category.
• Review and refine: Payment preferences change. Re-evaluate your sorting and visibility rules every quarter.

Conclusion

The idea that Shopify only uses PayPal is a common misconception rooted in the platform's quick-start defaults. In reality, you have access to a sophisticated array of payment technologies that can be tailored to your specific business needs. By moving beyond the defaults and taking control of your checkout experience, you can reduce fees, lower your chargeback risk, and provide a better experience for your customers.

Using HidePay gives you the tools to implement these strategies without needing a developer or a massive budget. Whether you are a dropshipper trying to avoid high-risk regions, a B2B merchant requiring bank transfers, or a global brand localizing for twenty different countries, controlling your payment visibility is the key to a smarter checkout. Learn more about how HidePay and HideShip work together in our HideSuite announcement, then add HidePay to your Shopify store to get started.

FAQ

Does Shopify charge a fee for using PayPal?

If you have Shopify Payments activated on your store, Shopify does not charge an additional transaction fee for PayPal orders. However, if you do not use Shopify Payments and rely solely on PayPal or another external gateway, Shopify will charge an additional transaction fee between 0.5% and 2% depending on your plan. This is on top of whatever processing fee PayPal itself charges.

Can I remove PayPal from my Shopify checkout?

Yes, you can deactivate PayPal at any time. Simply navigate to the "Payments" section of your Shopify settings, find the PayPal section, and select the option to deactivate. Many merchants choose to do this if they prefer to funnel all transactions through Shopify Payments to simplify their bookkeeping or reduce their overall fee percentage.

What is the difference between Shopify Payments and PayPal?

Shopify Payments is a fully integrated, native gateway that keeps the customer on your site and aggregates all financial data within the Shopify admin. PayPal is a third-party wallet that often redirects customers to a separate login screen. While both process credit cards, Shopify Payments generally offers lower overall costs for Shopify merchants by eliminating the platform's "external transaction fees."

How can I show different payment methods to different countries?

Shopify's default settings offer limited control over payment visibility by geography. However, by using an app like HidePay, you can create specific rules to show, hide, or rename payment methods based on the customer's country, zip code, or province. This allows you to offer local favorites like iDEAL only to Dutch customers while keeping the checkout clean for others.