Shopify 3rd Party Payment Gateway: Fees, Setup, and Strategy

Introduction

Using a Shopify 3rd party payment gateway is often a strategic necessity for merchants expanding into international markets or operating in high-risk industries. While Shopify Payments is the default for many, it is not available in every country, nor does it support every business model or local payment preference. Navigating the world of external providers requires a clear understanding of transaction fees, integration types, and how to manage these options at checkout to maintain high conversion rates.

In this guide, we will explore how to select the right provider, manage the additional costs imposed by Shopify, and optimize the customer experience. We will also discuss how HidePay helps you control which gateways appear to specific customers, ensuring your checkout remains clean and profitable. This article is for active Shopify merchants who want to move beyond basic settings and build a professional, globally-aware payment strategy.

By the end of this post, you will know exactly how to evaluate external providers and implement rules that protect your margins while serving your customers' preferred payment methods. If you’re ready to take action, you can install HidePay from the Shopify App Store to start customizing payment visibility at checkout.

Direct vs. External Payment Providers

When you move away from Shopify’s native payment system, you encounter two distinct types of integrations. Understanding the difference is vital because it directly impacts your customer’s checkout experience and your conversion rate.

Direct Providers

A direct provider allows the customer to complete their purchase without leaving your online store. The credit card fields are embedded directly within the Shopify checkout. This creates a professional look and keeps the user journey unified. Most major players like Stripe, Authorize.net, and Adyen function as direct providers.

External Providers

An external provider redirects the customer away from your store to a hosted payment page. Once the transaction is completed on the provider’s site, the customer is sent back to your "Thank You" page. While this can sometimes lower your PCI compliance burden, it adds friction to the checkout process. In some regions, however, customers are accustomed to these redirects for specific local methods, so it is not always a deterrent to conversion.

The Financial Reality of Third-Party Gateways

The most significant factor when choosing a Shopify 3rd party payment gateway is the cost structure. When you do not use Shopify Payments, you essentially pay two different sets of fees for every transaction.

Shopify Transaction Fees

Shopify charges a "third-party transaction fee" to cover the cost of maintaining the secure checkout infrastructure for external integrations. These fees vary based on your Shopify plan:

• Basic Plan: 2.0% per transaction
• Shopify Plan: 1.0% per transaction
• Advanced Plan: 0.5% per transaction

If you are on a Shopify Plus plan, these fees are generally waived if you use Shopify Payments as your primary gateway, though specific terms apply when using external processors alongside it.

Provider Processing Fees

On top of Shopify's cut, the payment gateway itself will charge a processing fee. This is usually a percentage of the transaction plus a flat cent fee (e.g., 2.9% + $0.30). When you add the Shopify transaction fee to the provider’s fee, your total cost of acceptance can easily exceed 4% or 5%. This makes it essential to hide high-fee gateways for low-margin products or specific regions where cheaper alternatives exist.

Why Merchants Choose 3rd Party Gateways

Despite the additional fees, thousands of successful stores rely on external providers. The decision is usually driven by one of three factors.

1. Geographical Availability

Shopify Payments is available in many major markets, but it does not cover the entire globe. If your business is registered in a country like Brazil, India, or many parts of Southeast Asia, you must use a Shopify 3rd party payment gateway to accept credit cards. Local providers often have better infrastructure and higher authorization rates in their specific regions.

2. High-Risk Industries

Certain product categories—such as supplements, vape products, or high-end jewelry—are often flagged as "high-risk" by primary processors. If Shopify Payments declines to service your industry, you must find a specialized high-risk merchant account and connect it via a supported gateway like Authorize.net or DigiPay.

3. Local Payment Preferences

In many markets, "credit card" is not the preferred way to pay. In the Netherlands, iDEAL dominates. In Germany, many customers prefer SEPA or Sofort. While Shopify Payments supports some local methods, an external provider might offer a more comprehensive suite of regional options that your specific audience expects.

Top 3rd Party Payment Gateways for Shopify

There are over 100 providers available, but a few industry leaders stand out for their reliability and ease of integration.

Stripe

Stripe is widely considered the gold standard for developer-friendly payments. It offers a massive range of local payment methods and excellent fraud prevention tools. Many merchants use Stripe when they need more control over their data or want to use advanced features like recurring billing and subscriptions that require a robust API.

PayPal

PayPal is unique because it often exists alongside your primary credit card processor. It is a trusted brand globally and can significantly boost conversion rates by offering a "one-click" experience. However, PayPal's dispute process can be challenging for merchants, and their fees are often on the higher end of the spectrum.

Authorize.net

As one of the oldest players in the space, Authorize.net is a reliable choice for North American merchants, especially those in high-risk sectors. They offer excellent customer support and a stable platform that integrates deeply with Shopify's administrative backend.

Klarna and Buy Now, Pay Later (BNPL)

While technically a payment method rather than a full gateway, BNPL providers like Klarna are essential for stores with high average order values. They allow customers to split payments while the merchant receives the full amount upfront. These services often charge higher fees, so we recommend only showing them for orders above a certain price threshold.

Strategic Management of Payment Methods

Once you have integrated a Shopify 3rd party payment gateway, the challenge shifts to management. Showing every available payment method to every customer creates "choice paralysis," which can lead to cart abandonment.

We suggest a more targeted approach. If you are selling globally, a customer in the United States does not need to see a European-specific gateway. Similarly, if a customer is buying a $5 item, offering a Buy Now, Pay Later option is unnecessary and potentially confusing.

Using a tool like HidePay on the Shopify App Store allows you to create rules that control the visibility of these gateways. You can hide specific providers based on the customer's country, the total value of the cart, or even specific product tags. This ensures that the customer only sees the most relevant and cost-effective options for their specific situation.

Action Plan for Reducing Friction:

• Sort by Popularity: Place your highest-converting, lowest-fee gateway at the top of the list. For instructions on reordering and renaming, see the official guide to sort and rename payment methods in HidePay.
• Rename for Clarity: If a gateway has a confusing name, rename it to something recognizable like "Secure Credit Card Payment."
• Hide High-Risk Options: If certain gateways are prone to chargebacks, hide them for customers with specific tags or in certain regions.
• Minimize Redundancy: Do not show three different ways to pay by credit card; choose the one with the best rates and hide the others.

Protecting Your Margins with Rules

Payment processing is one of the largest variable costs in e-commerce. A smart merchant doesn't just accept these fees; they manage them.

For instance, if you offer Cash on Delivery (COD), you might find that it has a high return-to-origin (RTO) rate in specific provinces. You can use HidePay to hide the COD option for those specific zip codes while keeping it active for the rest of the country. This protects your shipping margins without hurting your overall conversion rate. For step-by-step instructions on creating customizations based on cart value and other triggers, review the help article on how to create a payment customization.

Similarly, if you are using a 3rd party gateway that charges high international conversion fees, you might choose to only show that gateway when the cart total exceeds a certain amount, ensuring the profit margin can absorb the cost.

Technical Foundation: Shopify Functions

Modern payment customization on Shopify has moved away from old-fashioned scripts. We built our app using Native Shopify Functions. This is a technical shift that matters for your store’s performance.

Because the logic runs natively within Shopify’s infrastructure, there are no external scripts slowing down your checkout. This "Built for Shopify" approach ensures that your payment rules are applied instantly and reliably, even during high-traffic events like Black Friday. It also means you don't have to edit your theme code, which keeps your store easy to update and maintain. If you’re exploring Shopify Functions more broadly, Nextools has an in-depth look at checkout customization and native functions in their article introducing SupaEasy and other Functions-focused tools.

Optimizing for International Growth

When you use a Shopify 3rd party payment gateway to enter a new market, localization is your biggest lever for success. It isn't just about translating the language; it's about translating the trust.

In many countries, a recognizable local gateway carries more weight than a generic "Credit Card" logo. If you are using an external provider for a specific region, use the renaming feature in the app to label it exactly how a local customer would expect. For example, instead of "2Checkout," you might label it "Local Credit & Debit Cards."

By combining the right external gateway with precise visibility rules, you create a checkout experience that feels local to every customer, regardless of where they are in the world. For merchants who also need to manage shipping-based conditions, pairing payment controls with a shipping tool can be powerful; learn more about the bundled approach in the Nextools post about HideSuite: the bundle that includes HidePay and HideShip.

Conclusion

Setting up a Shopify 3rd party payment gateway is a powerful move for merchants who have outgrown the limitations of default processing. Whether you are seeking lower fees, better international support, or a more secure environment for high-risk goods, the right provider can transform your business.

To make the most of your setup:

• Evaluate providers based on both their processing fees and the Shopify transaction fee.
• Prioritize direct providers to keep customers on your site.
• Use rules to hide irrelevant or high-cost payment methods based on the customer's context.
• Monitor your conversion rates and chargeback levels for each gateway regularly.

If you are ready to take full control of your checkout experience, get HidePay for your store from the Shopify App Store. Our tool provides the flexibility you need to sort, rename, and hide payment methods, ensuring your checkout is always optimized for both profit and user experience.

FAQ

Does Shopify charge extra for using a 3rd party payment gateway?

Yes, Shopify charges a transaction fee ranging from 0.5% to 2.0% depending on your subscription plan. This is in addition to the processing fees charged by the gateway provider itself. These fees are only waived if you use Shopify Payments or for manual payment methods like bank transfers.

Can I use multiple payment gateways at the same time?

You can use Shopify Payments alongside PayPal and several "alternative" payment methods like Klarna or BitPay. However, you generally can only have one primary credit card processor active at a time. Using HidePay, you can switch between these or hide specific ones based on the customer's location or cart contents. For examples of creating country- or market-based rules, see the HidePay help article on organizing payment methods by country or Shopify Market.

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

A direct provider allows the customer to enter their payment details directly on your Shopify checkout page. An external provider redirects the customer to a different website to complete the payment before sending them back to your store. Direct providers generally offer a better user experience and higher conversion rates.

How do I hide a payment gateway for specific countries?

Shopify does not offer a native way to hide gateways by country, but you can achieve this using HidePay. By setting up a simple rule in the app, you can select which payment methods should be hidden or shown based on the customer's shipping address, ensuring they only see relevant options. See the help doc on hiding payment methods by country and creating multiple-country rules for exact steps.