Does Shopify Payments Include PayPal? A Merchant Guide

Introduction

Shopify Payments and PayPal are separate payment providers that often work side-by-side to power a store's checkout. While Shopify simplifies the integration of both, they remain distinct services with different fee structures, payout schedules, and management interfaces. Understanding how they interact is essential for any merchant looking to optimize their conversion rates while keeping processing costs under control.

When you launch a new store, Shopify typically enables PayPal Express Checkout by default using the email address associated with your account. However, this does not mean it is part of the Shopify Payments ecosystem. Using a tool like HidePay on the Shopify App Store allows you to manage these two services effectively, ensuring that your customers see the right payment options at the right time.

This guide clarifies the relationship between these two platforms, breaks down the associated fees, and provides actionable strategies for managing your checkout. You will learn how to balance the trust of a household name like PayPal with the cost-efficiency of Shopify’s native payment processor.

Understanding the Relationship Between Shopify Payments and PayPal

The most common point of confusion for new merchants is the "default" setup. When you open a Shopify store, both Shopify Payments and PayPal are often presented as "active" or "ready for setup" in your admin panel. However, they are fundamentally different.

What is Shopify Payments?

Shopify Payments is the platform’s native payment processor, powered by Stripe. It allows you to accept all major credit cards directly on your site without redirecting the customer to an external page. Because it is built directly into the platform, it offers the most integrated experience for order management, financial reporting, and payouts.

What is PayPal on Shopify?

PayPal acts as a third-party payment gateway. Even though Shopify makes it very easy to link your account, the transactions are processed by PayPal’s own servers. On Shopify, this usually takes the form of PayPal Express Checkout, which allows customers to use their saved PayPal information to complete a purchase quickly.

The Sept 2024 Partnership Update

Recent developments have slightly blurred the lines. In late 2024, PayPal and Shopify announced a partnership where PayPal would become an additional processor for a portion of Shopify Payments in the United States. This move is designed to unify reporting and simplify the backend for merchants, but for the customer at checkout, they still appear as separate choices: a credit card field (Shopify Payments) and a PayPal button.

How Fees Work When Using Both Providers

Choosing between these providers—or choosing to use both—has a direct impact on your profit margins. Each service has its own "take rate," and Shopify's own platform fees vary depending on whether you have Shopify Payments enabled.

Transaction Fees and Processing Fees

It is important to distinguish between "processing fees" and "third-party transaction fees."

1. Processing Fees: This is what the payment provider (Shopify Payments or PayPal) charges to move the money. Typically, this is around 2.9% + 30¢ for domestic transactions on basic plans.
2. Third-Party Transaction Fees: If you do not use Shopify Payments and choose to use only an external gateway like PayPal, Shopify charges an additional fee (usually 0.5% to 2% depending on your plan).

If you have Shopify Payments active, Shopify waives these third-party transaction fees for any other payment method you use, including PayPal. This is a significant incentive to keep Shopify Payments active even if a large portion of your customers prefer PayPal.

Currency Conversion and International Sales

Fees become more complex when selling globally. PayPal often charges higher cross-border fees and currency conversion markups, which can reach 3% to 4% above the base exchange rate. Shopify Payments also charges for currency conversion, but many merchants find their rates more transparent, especially when using Shopify Markets.

Action Summary: Fee Optimization

• Enable Shopify Payments to eliminate the 0.5%–2.0% transaction fee on all other gateways.
• Monitor your PayPal "International" vs. "Domestic" fee split in your PayPal merchant dashboard.
• Compare the payout speed; PayPal often gives instant access to funds, while Shopify Payments typically pays out on a 2–3 day rolling basis.

The Pros and Cons of Offering PayPal Alongside Shopify Payments

Most high-volume merchants choose to offer both. While Shopify Payments handles the bulk of credit card traffic, PayPal serves as a "trust signal." For merchants who want a combined approach to payments and shipping, see the Nextools post Introducing Nextools’ HideSuite: the bundle for smart Shopify merchants for how HidePay and HideShip work together.

The Case for PayPal

• Customer Trust: In many European and North American markets, customers feel more secure using PayPal because of their Buyer Protection program.
• Mobile Conversion: PayPal’s "One Touch" and "Express" features make it much easier for mobile users to check out without typing in sixteen-digit card numbers.
• Alternative Methods: Through PayPal, you can also offer Venmo (in the US) and "Pay Later" installments, which can increase the average order value.

The Case for Shopify Payments

• Unified Reporting: All your sales data, from order to payout, stays inside the Shopify admin.
• Lower Costs: Generally, the overall fee structure is lower, especially for international transactions.
• On-Site Experience: Customers stay on your domain throughout the entire process, which many brand owners prefer for a professional look.

Strategic Checkout Management with HidePay

While offering multiple payment options is good for conversion, having too many buttons can lead to "choice paralysis" or attract high-fee transactions you would rather avoid. We built our app to give you granular control over this exact scenario—see the official guide How to create a payment customization for step-by-step instructions on rule creation.

Hiding PayPal Based on Order Criteria

There are times when you might not want to offer PayPal. For example, if you are selling high-risk items or very high-ticket products where PayPal’s dispute process might be unfavorable to the merchant, you can create a rule to hide it. Our tool allows you to set conditions based on the product type, the total price of the cart, or even customer tags; see the help article Hide Payment Options by Customer TAG for a tag-based example. If a customer is tagged as "B2B," you might want to hide PayPal and only show "Bank Transfer" or "Invoicing."

Sorting for Better Conversions

The order in which payment methods appear matters. If you prefer customers use Shopify Payments (because the fees are lower for you), you should place it at the top. Use the app to reorder your payment list so that your preferred method is the first one the customer sees — the HidePay tutorial Sort and Rename payment methods in the Checkout walks through the exact steps.

Renaming for Clarity

Sometimes, "PayPal Express Checkout" isn't the most descriptive label for your specific audience. Our app lets you rename these methods. You might rename it to "PayPal / Venmo / Credit Card" to ensure customers know they have multiple options within that one button. This is particularly useful for international merchants who need to localize the checkout experience for different languages and regions.

Managing Express Checkout Buttons

One of the most common complaints from Shopify merchants is how "Express Checkout" buttons (like PayPal, Shop Pay, or Apple Pay) can clutter the top of the checkout page or the product page. These buttons often bypass the cart or specific discount logic you might have in place.

With the app, you can block these express buttons based on specific rules. If you have a complex shipping setup that requires a customer to go through the full checkout flow, you can hide the PayPal Express button while still allowing "PayPal" as a standard payment option at the final step of the checkout. This ensures the customer provides all necessary information before the payment is processed — see the guide Hide the Express Checkout with HidePay for how to block express buttons.

Key Use Cases for Payment Rules

• By Geography: Hide PayPal in specific countries where dispute rates are abnormally high.
• By Cart Total: Only show PayPal for orders under $1,000 to limit risk on high-value sales.
• By Shipping Method: If a customer chooses "Local Pickup," you might want to hide certain digital-only wallets — if you also need shipping controls, consider HideShip on the Shopify App Store.
• By Weekday: Some merchants disable certain high-fee options during weekend sales to protect margins.

Technical Integration and Performance

Modern Shopify stores need to be fast. Old methods of hiding payment options often relied on "hacking" the theme code or using heavy scripts that slowed down the checkout. This was not only bad for user experience but often broke during Shopify updates.

The tool we developed is built on Native Shopify Functions. This means the logic runs directly on Shopify’s infrastructure. Because it is a native integration, there is zero impact on your page load speed. It is also more secure and stable, as it doesn't require editing your checkout.liquid file (which is being deprecated) or using complex workarounds. If you’re exploring Shopify Functions more broadly, check out SupaEasy — generate Shopify Functions for function generation and migration tools.

When you set a rule in our app to hide or sort PayPal, that rule is executed at the server level by Shopify itself. This ensures that the checkout remains "Built for Shopify" certified and fully compliant with all security standards.

Conclusion

Shopify Payments and PayPal are distinct but complementary tools. While Shopify Payments provides a cost-effective, integrated foundation, PayPal offers the trust and speed that many customers demand. By understanding the fee structures and using both effectively, you can maximize your store's performance.

To truly master your checkout, you need the ability to control when and how these options appear. Managing the visibility and order of your payment methods is a proven way to reduce abandoned carts and protect your profit margins. For a deeper look at why HidePay was built and the problems it solves, read Introducing HidePay for Shopify.

Next Steps for Your Store:

• Check your "Payments" settings in Shopify to ensure Shopify Payments is active to avoid extra transaction fees.
• Review your last three months of PayPal statements to identify high-fee regions.
• add HidePay to your Shopify store to start creating rules that hide, sort, or rename your payment methods for a more efficient checkout.

FAQ

Does Shopify Payments include PayPal by default?

No, Shopify Payments and PayPal are separate providers. Shopify Payments is the native credit card processor, while PayPal is an external third-party gateway. However, Shopify automatically initiates a PayPal Express Checkout setup for new stores using the store owner's email address.

Will I pay extra fees for using both Shopify Payments and PayPal?

If you have Shopify Payments active, Shopify waives the "third-party transaction fee" on PayPal sales. You will still pay PayPal's standard processing fee (usually 2.9% + 30¢), but you won't pay an additional 0.5%–2% to Shopify.

Can I hide the PayPal button for certain products?

Yes, you can use the app to create rules that hide PayPal based on the contents of the cart. For example, if a cart contains a "Pre-order" item or a "High-Risk" product, you can set a rule to hide PayPal and only show credit card options through Shopify Payments.

How can I change the order of PayPal at the checkout?

Shopify does not provide a native way to reorder payment methods in the standard admin settings. By using our tool, you can sort your payment methods to ensure your preferred, lower-fee options appear first, helping guide customers toward the most cost-effective choice for your business.