Introduction
Choosing a third party payment gateway on Shopify is a strategic decision that directly affects your store's profit margins and checkout conversion rates. While Shopify Payments is the default choice for many, it is not available in every country, nor does it always offer the specific local payment methods required to convert international shoppers. Integrating an external provider allows you to expand your reach, but it also introduces additional transaction fees and potential checkout complexity. We developed HidePay on the Shopify App Store to give merchants precise control over this experience, allowing you to hide, sort, and rename payment methods based on specific logic. This guide explains how third-party gateways work, how to navigate the associated fees, and how to optimize your checkout for maximum efficiency.
Understanding Third-Party Payment Gateways on Shopify
A third-party payment gateway is an external service provider that handles the authorization and processing of credit card and digital wallet transactions for your Shopify store. Unlike Shopify Payments, which is Shopify’s native processing solution, third-party gateways operate independently. When a customer enters their payment details, the information is sent to the third-party processor, which then communicates with the banks to approve or decline the transaction.
There are two primary ways these gateways integrate with your store:
- Direct Providers: These allow the customer to complete their purchase directly on your checkout page without being redirected. This creates a cohesive experience that typically results in higher conversion rates.
- External Providers: These redirect the customer to a secure hosted page on the provider's website to complete the payment. Once the payment is finished, the customer is sent back to your order confirmation page.
While Shopify supports over 100 payment providers globally, the specific ones available to you depend on your store's location. Merchants often choose third-party options when they operate in regions where Shopify Payments isn't supported, or when they need specialized features like recurring billing for subscriptions or high-risk merchant accounts.
The Cost of Using External Gateways
The most significant factor to consider when moving away from Shopify’s native processor is the financial implication. Shopify charges an additional transaction fee for every order processed through a third-party gateway. This fee is separate from the processing fee charged by the gateway provider itself.
The transaction fee varies based on your Shopify plan:
- Basic Plan: 2.0% per transaction
- Shopify Plan: 1.0% per transaction
- Advanced Plan: 0.5% per transaction
- Shopify Plus: Usually 0.15% to 0.30%, though this can be waived if Shopify Payments is used as the primary gateway.
To calculate the total cost of an order, you must add the provider's fee (e.g., Stripe’s 2.9% + $0.30) to Shopify’s transaction fee. For a merchant on the Basic plan, this could mean losing nearly 5% of every sale to processing costs. However, for many international or high-volume merchants, the increased conversion rate from offering local payment methods outweighs these additional fees.
Hide, sort, and rename Shopify payment methods using powerful conditions. Customize your checkout and control payment options with HidePay.
When to Choose a Third-Party Provider
Despite the extra fees, there are several scenarios where using a third party payment gateway on Shopify is the smartest move for your business.
Regional Availability
Shopify Payments is currently available in a limited number of countries. If your business is based in a region like South America, parts of Southeast Asia, or Eastern Europe, you must use a third-party provider to accept payments. Providers like Adyen or 2Checkout (Verifone) offer broad international support that bridges these gaps.
Industry-Specific Requirements
Certain industries are labeled "high-risk" by standard processors. This can include anything from supplements and specialized electronics to high-value luxury goods. Shopify Payments has strict Terms of Service regarding what can be sold. If your products fall into a restricted category, a specialized third-party gateway like Authorize.net might be necessary to avoid account freezes or sudden shutdowns.
Local Payment Preferences
In many markets, credit cards are not the preferred way to pay. In the Netherlands, iDEAL is the dominant payment method. In Brazil, Pix is essential. In parts of Africa, mobile money solutions like M-Pesa are critical. If you are selling globally, you need gateways that support these localized methods. Using HidePay allows you to ensure these local options only appear for customers in those specific regions, keeping your checkout clean for everyone else—see our detailed announcement on the Nextools blog about HidePay for use cases and examples.
Better Rates for High Volume
If your store processes millions of dollars in monthly revenue, you may be able to negotiate custom rates with a provider like Stripe or Worldpay that are significantly lower than Shopify’s standard offering. Even with the added transaction fee, the lower base rate can result in a lower total cost per transaction.
Top 10 Third-Party Payment Gateways for Shopify
Selecting the right provider requires balancing fees, reliability, and the customer experience. Here are the most prominent options currently used by merchants:
1. PayPal
PayPal is nearly universal and offers one of the most trusted checkout experiences globally. It provides "Express Checkout," which can significantly speed up the purchase flow. While its fees are often on the higher end, its buyer protection programs give customers the confidence to purchase from brands they haven't visited before.
2. Stripe
Stripe is favored by technical merchants and those who require deep customization. It supports a vast array of payment methods and is particularly strong for subscription-based businesses. Stripe’s fraud detection tools are some of the most advanced in the industry, helping to reduce chargebacks before they happen.
3. Klarna
Klarna is the leader in the "Buy Now, Pay Later" (BNPL) space. By allowing customers to split their payments into installments, Klarna often increases average order value (AOV) and conversion rates. It is particularly effective in the fashion and lifestyle sectors across Europe and North America.
4. Authorize.net
As one of the oldest names in the industry, Authorize.net provides a highly stable and secure environment. It is an excellent choice for merchants who need a dedicated merchant account and those who operate in industries that require more flexible underwriting than Shopify Payments allows.
5. Adyen
Adyen is an enterprise-grade solution used by some of the world's largest retailers. It handles the entire payment flow—from gateway to processing—internally. This provides superior data insights and often higher authorization rates for international transactions.
6. Worldpay
Owned by FIS, Worldpay is a global powerhouse. It is ideal for merchants with a massive international footprint, as it can process payments in hundreds of currencies and offers localized support in dozens of countries.
7. 2Checkout (Verifone)
This is a go-to provider for merchants in countries where other major gateways don't operate. It supports over 45 payment methods and is highly localized, making it easier to sell into emerging markets.
8. Square
While mostly known for in-person POS systems, Square integrates well with Shopify for online sales. This is a practical choice for businesses that have a physical retail presence and want to keep their payment data centralized in one ecosystem.
9. Mollie
Mollie is the preferred provider for many European merchants, specifically those targeting the Benelux and DACH regions. It offers a simple, transparent fee structure and supports all major European payment methods, including iDEAL, Bancontact, and EPS.
10. Skrill
Skrill is widely used for international transfers and is a popular choice for merchants who want to offer digital wallet options beyond PayPal. It is particularly popular in Europe and is known for its high level of security.
Managing Multiple Gateways at Checkout
The more payment options you add, the more cluttered your checkout becomes. A "wall of buttons" at the final stage of the purchase can lead to decision fatigue, causing customers to abandon their carts. The goal is to provide the most relevant options without overwhelming the shopper.
This is where advanced management becomes necessary. For example, if you offer both PayPal and a standard credit card gateway, you may want to reorder them so that the credit card option appears first. Or, if you sell B2B, you might want to hide credit card options for orders over a certain dollar amount to avoid high processing fees, instead showing only "Bank Transfer" or "Invoice" options.
Our tool, HidePay, enables these exact scenarios. For step-by-step setup of a rule-based customization, see the help article on how to create a payment customization with HidePay. By using native Shopify Functions, we allow you to create rules that dictate exactly when a payment method should be shown. This ensures that a customer in Japan sees localized options like Konbini, while a customer in the US sees standard credit cards and Apple Pay.
Strategies for Optimizing Your Payment Flow
To get the most out of your third-party gateway setup, consider the following optimization strategies.
Surface the Most Profitable Methods
Not all payment methods cost you the same. A standard credit card transaction might cost 2.9%, while a bank transfer might cost a flat fee of $1.00. By sorting your payment methods, you can place the most cost-effective options at the top of the list. While you should always prioritize the customer's preferred way to pay, subtle reordering can nudge them toward options that protect your margins. For instructions on ordering and renaming, see the HidePay guide to sort and rename payment methods in the checkout.
Reduce Chargeback Risk
Certain payment methods carry higher risks of fraud or chargebacks. If you notice that a specific gateway attracts a high volume of fraudulent orders for a particular product category, you can create a rule to hide that gateway when those specific products are in the cart. The help doc showing how to hide payment methods when a particular collection or product is present provides a practical walkthrough: hide if a collection of products is in the cart with HidePay.
Localize the Labeling
Sometimes the default name of a payment gateway isn't clear to the customer. For instance, a gateway might be called "GlobalPay," but in a specific country, it is known for processing a local card network. Renaming these options to something familiar, like "Local Credit/Debit Cards," can reduce friction and build trust during the final seconds of the transaction.
Control Express Checkout Buttons
Express checkout buttons (like PayPal Express or Shop Pay) can be incredibly fast, but they sometimes bypass important cart attributes or terms and conditions checkboxes. HidePay includes controls specifically for express checkout — see the help guide to hide the Express Checkout with HidePay for options and limitations (note: some express-button controls require Shopify Plus). If your goal is broader order validation (blocking or warning on checkout conditions), consider our related app CartBlock on the Shopify App Store which validates or blocks orders using flexible conditions.
How to Implement Custom Logic with HidePay
Setting up these rules does not require any coding knowledge or manual theme edits. Because the app is built on Shopify Functions, it works natively within the Shopify environment. This means your checkout remains fast and secure while gaining a level of flexibility that was previously only available to Shopify Plus merchants using complex scripts.
Here is how you can get started:
- Define the Condition: Choose what triggers the rule. This could be the customer's country, the total price of the cart, or a specific tag on the customer's profile. For details on geographic targeting, see the help doc explaining how to hide payment methods for a specific city within a country.
- Select the Action: Decide whether you want to hide, sort, or rename a specific payment method.
- Apply the Rule: Once saved, the rule takes effect immediately. For example, you could create a rule that says: "If the shipping country is Germany, hide Cash on Delivery and move Klarna to the first position."
If you are building more advanced Shopify Functions or want AI-assisted generation of payment/discount/shipping functions, check out SupaEasy on the Shopify App Store for codeless function generation and migration tools.
This level of precision ensures that you aren't just offering a third party payment gateway on Shopify, but are actively managing it to serve your business goals.
Key Takeaways for Merchants
- Audit your fees: Regularly check the combined cost of Shopify’s transaction fees and your provider's processing fees to ensure your margins remain healthy.
- Prioritize relevance: Only show payment methods that are relevant to the customer's location and currency.
- Protect your business: Use payment rules to hide high-risk gateways for high-value orders or specific product types.
- Test and iterate: Change the order of your payment methods to see if it impacts your conversion rates or your average processing costs.
If you also need the same rule-based control for shipping methods, HideShip offers matching functionality for shipping that complements payment rules—see HideShip on the Shopify App Store.
Conclusion
A third party payment gateway on Shopify is a powerful tool for global expansion and industry-specific flexibility. While the additional fees require careful management, the ability to offer localized and trusted payment methods can significantly boost your bottom line. By using a tool like HidePay, you move beyond the default limitations of the Shopify admin, gaining the power to customize the checkout experience for every customer segment.
To summarize your next steps:
- Identify the international markets where your current payment setup is causing friction.
- Select a third-party gateway that addresses those specific regional needs.
- Use logic-based rules to ensure your checkout remains clean, relevant, and cost-effective.
Take control of your checkout experience today — install HidePay and begin building a more efficient and profitable payment flow. For further reading on bundling HidePay with other Nextools apps, see our post about HideSuite: the bundle for smart Shopify merchants.
FAQ
What are Shopify's third-party transaction fees?
Shopify charges a fee for orders processed through any provider other than Shopify Payments. This fee is 2.0% for Basic plans, 1.0% for Shopify plans, and 0.5% for Advanced plans. These fees are in addition to the processing rates charged by the gateway provider itself.
Can I use Shopify Payments and a third-party gateway at the same time?
Yes, many merchants use Shopify Payments for standard credit card processing and add third-party gateways for specific needs, such as PayPal or Buy Now, Pay Later services like Klarna. However, keep in mind that Shopify's transaction fees will still apply to the orders processed through those external third-party providers.
How do I hide a payment method for a specific country?
By default, Shopify does not offer a native way to hide payment methods by geography. You can achieve this using HidePay — see the HidePay help doc on how to create a payment customization and the guide for organizing payment methods by country or Shopify Market.
Will using a third-party gateway slow down my checkout?
Direct integrations with major providers are generally very fast and do not noticeably impact checkout speed. Because our app uses native Shopify Functions, any rules you create to hide or sort these gateways are processed within Shopify's own infrastructure, maintaining a high-performance experience for your customers.