Introduction
Shopify supports PayPal as a primary, default payment method for merchants in nearly every region where the platform operates. In most cases, it is the very first payment option available to you when you open a new store. Because PayPal is one of the most recognized financial brands globally, many merchants rely on it to build immediate trust with new customers who may be hesitant to enter credit card details directly.
Managing this integration effectively requires a balance between offering customer choice and controlling your transaction costs. While the setup is straightforward, optimizing how and when PayPal appears at your checkout is where successful merchants find their edge. Many of our users integrate HidePay to gain more granular control over these options, ensuring the right payment methods appear for the right customers. To try it, you can install HidePay from the Shopify App Store.
This guide explores how the integration works, the fee structures you should expect, and the strategic ways you can manage PayPal's visibility to protect your margins. By the end of this article, you will understand how to leverage PayPal to maximize conversions without sacrificing control over your checkout flow.
How Shopify Supports PayPal
Shopify treats PayPal as a core part of its ecosystem rather than a standard third-party add-on. For most new stores, Shopify automatically creates a PayPal Express Checkout account using the email address you used to sign up for your store. This allows you to start accepting payments almost immediately, though you must eventually complete the account setup to withdraw your funds.
The relationship between the two companies evolved significantly in September 2024. PayPal and Shopify announced an expanded strategic partnership in the United States, where PayPal began powering a portion of Shopify Payments. This means that for US-based merchants, PayPal is no longer just a separate button on the page; it is becoming more deeply integrated into the backend infrastructure of the store.
This integration provides a more unified experience for managing orders and payouts. Historically, a merchant had to look at two different dashboards to reconcile their finances. With the recent updates, the goal is to provide a consolidated view, making it easier to track reporting and handle chargeback flows within the Shopify admin.
The Difference Between PayPal Express and Standard Flows
When you enable PayPal on your store, it typically defaults to PayPal Express Checkout. This is a specific type of integration designed to reduce the number of steps a customer takes to finish a purchase.
PayPal Express Checkout
In this flow, the customer clicks the PayPal button early in the checkout process—often on the cart page or the first step of the checkout. They are redirected to PayPal to authorize the payment and then returned to Shopify to finalize the shipping method and complete the order. This "express" nature is intended to capture the sale before the customer has a chance to change their mind.
The Standard Checkout Flow
If a customer chooses PayPal later in the process, during the final "Payment" step, the experience is slightly different. They enter their shipping and contact information on your store first, and only then do they interact with the PayPal interface.
Many merchants prefer the standard flow because it ensures that customer data—like email addresses and phone numbers—is captured in their own database before the transaction is handed off to a third party. If you want to force customers through the standard flow, we provide the ability to block express checkout buttons based on specific rules, ensuring you always capture the customer data you need for marketing or fulfillment. Learn how to hide the PayPal Express Checkout button in checkout with HidePay.
Hide, sort, and rename Shopify payment methods using powerful conditions. Customize your checkout and control payment options with HidePay.
Understanding PayPal Transaction Fees on Shopify
The cost of using PayPal on Shopify is often a point of confusion for new merchants. Your total cost per transaction depends on whether you also use Shopify Payments and which Shopify plan you are currently on.
The "Third-Party" Surcharge
If you do not use Shopify Payments and instead rely solely on PayPal or other external gateways, Shopify charges an additional transaction fee. This fee varies by plan:
- Basic Plan: 2.0%
- Shopify Plan: 1.0%
- Advanced Plan: 0.5%
However, if you enable Shopify Payments alongside PayPal, Shopify typically waives this additional surcharge for your PayPal transactions. You will still pay PayPal’s own processing fees, but you won't be "double-taxed" by Shopify for the privilege of using an external provider.
PayPal’s Internal Fees
PayPal typically charges a standard rate of 2.9% + $0.30 per transaction for domestic sales in the United States. International transactions often carry higher fees, sometimes reaching 4.4% plus a fixed fee based on the currency received. There may also be currency conversion markups of roughly 3% to 4% if you are receiving payments in a currency other than your primary bank account currency.
Chargeback and Dispute Fees
When a customer files a dispute through PayPal, the platform charges a fee to investigate the claim. This is usually around $20, though it can vary by region. This is slightly higher than the $15 fee typically associated with Shopify Payments disputes. Protecting your store from these fees is a primary reason many merchants choose to hide PayPal for high-risk orders or specific geographic regions.
Setting Up the Integration
The process of connecting your accounts is designed to be completed in a few minutes. Because it is a native integration, you do not need to install any custom code or scripts.
- Access Payment Settings: Navigate to the "Payments" section within your Shopify admin settings.
- Locate PayPal: You will see a dedicated PayPal section. If it says "Account Created," you simply need to click to complete the setup.
- Activate Express Checkout: Select the version of PayPal you wish to use. In most cases, this will be PayPal Express Checkout.
- Onboarding and Permissions: You will be redirected to a PayPal login screen. You must use a PayPal Business account; personal accounts are not supported for Shopify integrations. Once you log in, you will be asked to grant Shopify permission to process payments and refunds on your behalf.
- Finalize in Shopify: After granting permissions, you are sent back to your Shopify admin. Ensure the "Test Mode" is turned off if you are ready to accept real money.
For a step‑by‑step walkthrough on creating the kinds of rules discussed in this guide, see How to create a payment customization in HidePay. If you have an existing PayPal account that uses a different email than your Shopify store, you can easily change the email in the payment settings to ensure the two accounts sync correctly.
Strategic Reasons to Hide or Sort PayPal
While PayPal is a powerful tool for conversion, it is not always the best option for every transaction. Smart merchants use rules to determine when PayPal should be shown, hidden, or moved to a different position in the list.
High-Risk Countries and Geography
In some regions, the risk of "unauthorized transaction" claims is significantly higher. If you find that a specific country produces a high volume of PayPal disputes, you can create a rule to hide the option for customers in that geography. This forces them to use a standard credit card processor where you might have better fraud protection or lower dispute fees. See How to easily organize payment methods by country or by Shopify Market to map payment options by country or market.
Protecting Your Margins on Low-Value Orders
Because PayPal has a flat fee component ($0.30), very small orders can see a significant percentage of the profit eaten by transaction costs. Some merchants choose to hide PayPal for orders under a certain dollar amount, steering customers toward payment methods with more favorable fee structures.
Prioritizing Preferred Methods
You may have a preferred payment gateway that offers lower fees or faster payouts. Instead of removing PayPal entirely, you can use our tool to sort your payment methods. By moving your preferred gateway to the top of the list and pushing PayPal to the bottom, you give customers the choice they want while subtly guiding them toward the option that is better for your business. Learn how to Sort and Rename payment methods in the Checkout to prioritize your preferred gateways.
Renaming for Localization
In some markets, "PayPal" is synonymous with "Credit Card" for many shoppers. In others, you might want to highlight that Venmo is available through the PayPal gateway (which is a feature of the PayPal Complete Payments integration). Renaming the payment method to "PayPal, Venmo, or Credit Card" can provide the clarity needed to prevent a customer from bouncing because they don't see their preferred sub-option.
Because payment and shipping choices often interact, many merchants use HidePay together with shipping controls to eliminate unprofitable combinations of payment + shipping methods. See our post introducing HideSuite for how HidePay and HideShip work together to streamline checkout and cut costs.
Managing the Checkout Experience with Native Functions
The modern way to customize your Shopify checkout is through Shopify Functions. This is a significant shift from the older "Shopify Scripts" method, which required complex coding and was only available to Shopify Plus merchants.
HidePay is built on these native Shopify Functions. This means that the rules you create to hide or sort PayPal run directly on Shopify's infrastructure. There are several benefits to this approach:
- Performance: Because the logic runs natively, there is no delay in loading the checkout page.
- Reliability: Native functions are more stable than third-party scripts and are less likely to break when Shopify updates its platform.
- Accessibility: These customizations are now available to more than just Plus merchants, allowing smaller stores to compete with the checkout sophistication of enterprise brands.
If you want to generate or migrate Shopify Functions without code, consider SupaEasy — a codeless functions app that helps convert Scripts to Functions and create new native logic for your store.
Using a "Built for Shopify" certified app ensures that your checkout remains compliant with Shopify’s security standards while giving you the flexibility to hide, sort, and rename payment methods as needed.
Impact on Conversions and Trust
The primary reason to support PayPal is the "halo effect" of trust. For a new store without a long history of reviews, the presence of a PayPal button signals to the customer that their purchase is protected. PayPal’s Purchase Protection program is well-known, and for many, it is the deciding factor in whether to buy from a new brand.
However, too many choices can lead to decision fatigue. If your checkout is cluttered with PayPal, Shop Pay, Apple Pay, Google Pay, and standard credit card fields, the customer may feel overwhelmed. Our introductory post on HidePay explains how reducing irrelevant payment options can improve checkout clarity and conversion rates.
What to do next:
- Audit your current transaction fees for the last 30 days to see how much PayPal is costing you compared to Shopify Payments.
- Check your dispute history to identify if PayPal claims are coming from specific regions.
- Use a tool to reorder your payment methods so the most cost-effective option for you is also the easiest for the customer to find.
PayPal and B2B Commerce on Shopify
For merchants running B2B (Business to Business) operations, PayPal support can be more complex. B2B buyers often prefer net terms, bank transfers, or corporate credit cards. PayPal is frequently seen as a consumer-facing tool, and the fees on large wholesale orders can be substantial.
If you use customer tags to identify your B2B buyers, you can create a rule to hide PayPal for that specific group. This ensures that your wholesale partners use the payment methods you've negotiated with them, such as wire transfers or ACH, while your retail customers still enjoy the convenience of PayPal. Refer to the HidePay documentation for examples of hiding payment options by customer tag when building B2B rules.
Handling Payouts and Payout Times
One of the main differences between Shopify Payments and PayPal is how you receive your money.
When a customer pays via Shopify Payments, the funds are typically deposited into your bank account on a rolling basis (every 2–3 business days in the US). When a customer pays via PayPal, the money goes into your PayPal Business balance immediately.
While "immediate" sounds better, it adds an extra step to your bookkeeping. You must manually or automatically withdraw those funds to your bank account, which can take an additional 1–3 days unless you pay for an "Instant Transfer." For merchants who need tight control over cash flow, this split in where money lands can be a challenge. We often suggest sorting PayPal lower in the list if you prefer the consolidated, automatic payouts offered by Shopify Payments.
International Considerations
If you sell globally, PayPal’s support is a double-edged sword. It is available in over 200 countries and supports 25+ currencies, making it a powerful tool for international expansion. However, the international fees are significantly higher than domestic ones.
For example, a US merchant selling to a customer in the UK might pay a 4.4% transaction fee plus a currency conversion fee. If you are selling a low-margin product, this could eliminate your profit entirely.
In these scenarios, you don't necessarily want to disable PayPal globally. Instead, you can use a geography-based rule to hide PayPal only in countries where the shipping costs and transaction fees combined make the sale unprofitable. For guidance on hiding payment methods by currency, see How to Hide Payment Methods for Foreign Currencies with HidePay on Shopify.
Conclusion
Shopify’s support for PayPal is deep, native, and evolving. Whether you are using it to build trust with new shoppers or leveraging the new 2024 partnership to streamline your US-based processing, it remains a cornerstone of the Shopify checkout experience.
However, "default" settings are rarely optimized for your specific business needs. To truly master your checkout, you must move beyond simply enabling a button. By strategically hiding, sorting, and renaming your payment options, you can create a checkout flow that converts at a higher rate while keeping your transaction costs as low as possible.
- Enable PayPal to build trust, especially in new markets.
- Use Shopify Payments alongside it to avoid extra third-party fees.
- Monitor your disputes and fees by region to identify where PayPal might be costing you too much.
- Control the visibility and order of your payment methods based on customer data and cart value.
If you are ready to take full control of your checkout experience, try HidePay on Shopify. Our app gives you the tools to implement the rules discussed in this guide, helping you protect your margins and simplify the experience for your customers.
FAQ
Does Shopify charge extra fees for using PayPal?
If you have Shopify Payments activated, Shopify typically does not charge an extra "third-party" transaction fee for PayPal orders. If you do not use Shopify Payments, you will pay a surcharge of 0.5% to 2.0% to Shopify on top of PayPal's own processing fees.
Can customers use a credit card through PayPal without an account?
Yes, PayPal offers a "Guest Checkout" feature that allows customers to pay with a credit or debit card without creating a PayPal account. You must ensure this feature is enabled within your PayPal Business account settings to offer it on your Shopify store.
How do I remove the yellow PayPal button from my product pages?
The yellow "Express" button is part of Shopify's accelerated checkout feature. You can manage this in your Shopify theme settings or by using an app to block express checkout buttons based on specific rules, such as which products are in the cart. See the HidePay guide on hiding express checkout buttons for configuration steps.
Why is my PayPal payment still "Pending" in Shopify?
This usually happens if the email address you used for your Shopify store doesn't match the email address on your PayPal Business account. It can also happen if you haven't yet verified your email address with PayPal or if the transaction is being held for a standard fraud review by PayPal.