Optimizing Shopify Third Party Payment Gateways for Growth

Introduction

Choosing the right payment infrastructure is one of the most consequential decisions a Shopify merchant makes. While Shopify Payments is the default for many, it is not always available or the most strategic choice for every business. Integrating Shopify third party payment gateways allows you to reach international customers, offer localized payment methods, and manage high-risk transactions that native solutions might avoid.

Managing these gateways effectively requires more than just activation. It involves controlling when and where they appear to maximize conversion rates and minimize transaction fees. This is where HidePay on the Shopify App Store becomes an essential part of your toolkit, allowing you to hide, sort, and rename payment methods based on specific logic. By the end of this article, you will understand how to select the best providers for your store and how to optimize your checkout experience to protect your margins.

Understanding Shopify Third Party Payment Gateways

Shopify classifies payment providers into two primary categories: direct providers and external providers. Understanding the difference is vital for maintaining a professional checkout experience.

A direct provider allows customers to complete their purchase entirely within your online store. They enter their credit card details directly into the Shopify checkout, and the transaction is processed without a redirect. This is generally preferred because it reduces friction and keeps the customer on your domain.

An external provider, also known as a hosted or redirect gateway, sends the customer to a third-party website to complete their payment. Once the payment is finalized, the customer is redirected back to your "Thank You" page. While this adds a step to the checkout process, it is often necessary for certain local payment methods or in regions where direct providers are limited.

The Role of Transaction Fees

When you use any provider other than Shopify Payments, Shopify charges an additional transaction fee on every order. This fee varies based on your Shopify plan:

• Shopify Starter: 5%
• Basic Shopify: 2%
• Shopify: 1%
• Advanced Shopify: 0.5%
• Shopify Plus: 0.15% (waived for some manual methods)

These fees are in addition to the processing fees charged by the third-party gateway itself. To maintain profitability, we recommend analyzing these costs against the potential conversion lift that a specific gateway provides.

Why Merchants Choose Third-Party Gateways

Despite the additional transaction fees, thousands of successful stores rely on third-party providers. The choice is usually driven by geography, risk profile, or specialized customer needs.

Global Expansion and Localization

Shopify Payments is available in approximately 23 countries. If your business is based in a country not on that list, you must use a third-party gateway. Furthermore, even if you can use native payments, your customers in specific regions may prefer local options. For instance, customers in the Netherlands frequently use iDEAL, while those in Poland often prefer Przelewy24. If your primary gateway does not support these, you will likely see higher abandonment rates in those markets.

High-Risk Industries

Certain product categories—such as supplements, electronics, or specialized apparel—are often flagged as high-risk by traditional banks. Shopify Payments may decline to work with stores in these niches to avoid high chargeback rates. Third-party gateways that specialize in high-risk processing allow these businesses to operate without the constant threat of account suspension.

Redundancy and Backup

Relying on a single payment provider creates a single point of failure. If a gateway experiences technical downtime or holds your funds for review, your entire revenue stream stops. Many established merchants set up a secondary third-party gateway as a backup. This ensures that even if one provider has an issue, the store remains operational.

Top Shopify Third Party Payment Gateways Reviewed

Selecting a provider depends on your business's unique needs. Here are the most prominent options currently available for Shopify merchants.

1. Stripe

Stripe is often the first choice for merchants who need flexibility and a developer-friendly interface. While Stripe powers Shopify Payments, using a standalone Stripe account gives you more control over your data and access to advanced features like Stripe Billing for subscriptions.

• Best for: International stores, subscription models, and merchants who want detailed reporting.
• Key Benefit: Exceptional security and a wide range of supported currencies (135+).
• Action: Ensure your store is in a supported country, as Stripe has specific regional requirements.

2. PayPal

PayPal is virtually synonymous with online shopping. It offers "Accelerated Checkout" buttons that allow customers to pay with a single click, using their saved shipping and billing information.

• Best for: Stores looking to build immediate trust with new customers.
• Key Benefit: Strong buyer protection makes customers more comfortable purchasing from unknown brands.
• Action: Always verify your PayPal account early to avoid holds on your initial sales.

3. Authorize.net

As one of the oldest players in the industry, Authorize.net is known for reliability. It is a frequent choice for US and Canadian merchants who want a stable, enterprise-grade gateway.

• Best for: Established businesses and those requiring virtual terminals for phone orders.
• Key Benefit: Robust fraud detection tools and a customizable checkout experience.
• Action: Check their monthly fee structure, as they often charge a flat fee in addition to transaction percentages.

4. Klarna and Buy Now, Pay Later (BNPL)

Klarna allows customers to pay in installments or "Pay Later." While technically a payment method, it often integrates as a gateway option. Offering BNPL can significantly increase your average order value (AOV) by making expensive items more accessible.

• Best for: Fashion, home decor, and high-ticket electronics.
• Key Benefit: Merchants get paid upfront, while Klarna takes on the credit risk of the customer.
• Action: Use rules to show BNPL options only for carts over a certain dollar amount to avoid paying higher fees on small transactions.

5. Adyen

Adyen is an enterprise-level solution used by some of the largest retailers in the world. It provides an all-in-one platform for online, mobile, and in-store payments.

• Best for: High-volume Shopify Plus merchants with a significant global presence.
• Key Benefit: Deep data insights and high authorization rates across multiple regions.
• Action: Only consider Adyen if your monthly volume justifies their more complex onboarding process.

Strategic Management of Your Payment Methods

Activating a gateway is only half the battle. If you offer too many options, you create "analysis paralysis" for the customer. If you offer the wrong options, you lose the sale. Effective payment management means showing the right method to the right person at the right time.

Sorting for Better Conversion

The order in which payment methods appear matters. If most of your customers use credit cards, that should be the first option. If you are selling to a younger demographic in Europe, mobile wallets or BNPL options might perform better at the top. We built our app to give you the ability to reorder these options precisely. By guiding customers toward your most successful (or lowest-cost) payment methods, you improve both your conversion rate and your bottom line.

Hiding Gateways Based on Logic

Not every payment method is appropriate for every order. Here are three common scenarios where hiding a gateway is beneficial:

1. Geography-Based Rules: If a specific third-party gateway has high fees for international cards, you can hide it for customers outside your home country. Conversely, you can hide "Cash on Delivery" for regions where your courier doesn't support it.
2. Product-Based Rules: High-risk items or digital products might not be eligible for certain BNPL services. You can set a rule to hide those payment options if a specific product or tag is in the cart—see how to hide a collection of products in the cart with HidePay for step-by-step guidance.
3. Cart Total Rules: Payment processors often have a mix of flat fees and percentages. For very small orders, a gateway with a high flat fee might eat your entire profit margin. You can hide those options for carts under a certain value; the HidePay guide on creating payment customizations explains how to apply cart-total conditions.

Renaming for Clarity

Sometimes the default name provided by a gateway is confusing to the end customer. A gateway might appear as "Authorize.net" when the customer is looking for "Credit Card." Renaming these labels to be more descriptive—such as "Secure Credit Card Payment" or "Pay with Local Bank Transfer"—removes friction and builds trust during the final seconds of the purchase. For instructions on renaming (and sorting) payment methods, see the HidePay tutorial on how to hide, sort, or rename payment methods.

Technical Foundation: Native Shopify Functions

In the past, managing these gateways required complex workarounds or the Shopify Script Editor, which was limited to Shopify Plus merchants. Our tools are built on Native Shopify Functions.

This is a technical shift that matters for your store's performance. Functions run directly on Shopify’s global infrastructure. This means:

• No Latency: The logic for hiding or sorting happens instantly. There is no waiting for a third-party server to respond.
• Native Stability: Because it is built into the Shopify checkout core, it is significantly more reliable than old-school JavaScript injections or theme hacks.
• Compatibility: It works perfectly with the new Checkout Extensibility, ensuring your store is ready for the future of Shopify.

If you want to explore how Nextools bundles complementary tools to optimize checkout and shipping together, read the Nextools post introducing the HideSuite bundle.

How to Set Up Third-Party Gateways in Shopify

Configuring a new gateway is a straightforward process within your Shopify admin.

Action Summary: Setup Steps

• Navigate to Settings > Payments in your Shopify admin.
• Select Choose a provider if you do not have Shopify Payments, or Switch to a third-party provider if you are currently using native payments.
• Search for your chosen gateway (e.g., Stripe, Authorize.net).
• Enter your account credentials provided by the gateway.
• Test the integration by placing a test order in "Bogus Gateway" mode or using a test card provided by the processor.

Once the gateway is active, we recommend using HidePay to set up your display rules. For examples like hiding by cart attribute or blocking express checkout buttons, consult the HidePay help article on hiding payment methods using cart attributes.

Conclusion

Shopify third party payment gateways provide the flexibility needed to scale a store globally and serve diverse customer needs. While they come with additional transaction fees, the ability to offer localized and high-trust payment methods often outweighs the cost. Success lies in how you manage these options. Showing too many choices can overwhelm customers, while showing the wrong ones can lead to abandonment.

By utilizing the "Smart Checkout" approach—right rule, right condition—you can protect your margins and improve the customer experience. Whether you are hiding high-fee options for small carts or sorting local gateways for international shoppers, control is the key to a profitable checkout.

Nextools provides the infrastructure to make this level of customization possible for any merchant. HidePay helps you manage your checkout logic without writing a single line of code, ensuring your payment strategy works for your business, not against it.

Ready to take control of your checkout?
Install HidePay and start optimizing your payment methods today.

FAQ

Does using a third-party gateway increase my Shopify fees?

Yes. Unless you are on a specific Shopify Plus configuration, Shopify charges an additional transaction fee ranging from 0.5% to 2% (depending on your plan) for orders not processed through Shopify Payments. This is in addition to the processing fees charged by the third-party provider.

Can I use multiple third-party payment gateways at once?

Shopify allows you to have only one primary credit card processor active at a time. However, you can add "Additional Payment Methods" such as PayPal, Amazon Pay, and various Buy Now Pay Later services (like Klarna or Affirm) alongside your primary credit card gateway.

What is the difference between a direct and an external provider?

A direct provider allows the customer to enter their payment information directly on your Shopify checkout page. An external provider redirects the customer to a separate, hosted page to complete the transaction before sending them back to your store. Direct providers typically offer a better user experience and higher conversion rates.

How can I hide a specific payment gateway for certain products?

While Shopify does not offer this natively in the admin settings, you can use HidePay to create product-based rules. See the help article on how to hide a collection of products in the cart with HidePay for step-by-step instructions on tagging products and applying rules.