What Payment Gateway Does Shopify Use?

Introduction

Shopify uses a built-in solution called Shopify Payments as its primary payment gateway. It is the native processing tool for the platform. It allows merchants to accept all major credit cards and digital wallets without integrating a third‑party service. While this is the default option for many, the platform also supports over 100 external payment providers globally.

Understanding which gateway your store uses is the first step toward a more efficient checkout. Managing how these options appear to your customers is just as important. We built HidePay to help merchants control this experience. By choosing the right gateway and refining how it is presented, you can reduce cart abandonment and lower your transaction costs. If you want to try it right away, you can install HidePay from the Shopify App Store.

This article explains the mechanics of Shopify’s payment infrastructure and the differences between its native gateway and third‑party alternatives. You will learn how to identify the best setup for your business and how to optimize your checkout display for better conversion rates.

The Primary Solution: Shopify Payments

Shopify Payments is the native payment processing system for the platform. It is powered by Stripe’s infrastructure but fully integrated into the Shopify admin. This means you do not need to log into a separate website to view your payouts or manage disputes. Everything happens within your store dashboard.

When you use the native gateway, you eliminate the technical work of connecting an external provider. It is ready to use as soon as you provide your business details and bank account information. For most merchants in supported regions, this is the most cost‑effective and straightforward path.

Key Benefits of the Native Gateway

The most significant advantage of using the native gateway is the removal of additional transaction fees. Shopify typically charges a percentage on every sale if you use a third‑party provider. These fees range from 0.5% to 2.0% depending on your plan level. When you use the native system, these extra fees are waived.

You also gain access to Shop Pay. This is an accelerated checkout feature that saves customer information for future purchases. It is known to increase conversion rates by making the buying process faster for returning shoppers. Additionally, the native gateway supports multi‑currency selling. This allows you to show prices and accept payments in the local currency of your international customers.

Eligibility and Regional Availability

Shopify Payments is not available in every country. It is currently supported in major markets like the United States, Canada, the United Kingdom, Australia, and many parts of Europe and Asia. If your business is registered in a country where it is not yet available, you must use a third‑party gateway.

Certain business types are also restricted from using the native gateway. This typically includes high‑risk industries or products that have strict regulatory requirements. If your store falls into these categories, Shopify will prompt you to select an alternative provider during the setup process.

How Third-Party Payment Providers Work

If the native gateway is not an option or does not meet your specific needs, you can choose from a vast list of third‑party providers. These are independent companies that handle the transaction and then transfer the funds to your account. Common examples include PayPal, Stripe, Authorize.net, and Amazon Pay.

Shopify categorizes these providers into two distinct types: direct providers and external providers. The difference between them significantly impacts the customer experience.

Direct vs. External Providers

A direct provider allows the customer to complete their entire purchase without leaving your store. The credit card fields are embedded directly into the Shopify checkout page. This creates a cohesive experience that builds trust and keeps the customer focused on the purchase.

An external provider redirects the customer to a different website to finish the payment. Once the payment is confirmed, the customer is sent back to your "Thank You" page. While these are common for services like PayPal Express, they can sometimes cause confusion or friction. Some shoppers may feel uneasy being redirected to an unfamiliar URL during a high‑value transaction.

When to Choose a Third-Party Gateway

There are several reasons why a merchant might opt for a third‑party gateway over the native one:

• Regional Requirements: You operate in a country where Shopify Payments is unavailable.
• High-Risk Products: Your industry is not supported by the native gateway’s terms of service.
• Customer Preference: Your target market heavily relies on a specific local provider that is not included in the standard setup.
• Competitive Rates: You have negotiated a lower processing rate with a specific bank or provider due to high sales volume.

Key Takeaway: Using a third‑party gateway often results in additional transaction fees from Shopify. Always calculate the total cost, including the provider's fee and Shopify's third‑party surcharge, before making a switch.

Understanding Transaction Fees and Processing Rates

Every payment gateway involves costs. These are typically split into two categories: processing rates and transaction fees. It is vital to understand the math to protect your profit margins.

Credit Card Processing Rates

This is the fee the gateway provider charges to process the transaction. If you use Shopify Payments, these rates are determined by your Shopify subscription plan. Higher‑tier plans generally offer lower processing rates. For example, a merchant on the Advanced plan will pay less per transaction than a merchant on the Basic plan.

Shopify Transaction Fees

This fee only applies if you do not use Shopify Payments. It is an "additional" fee charged by Shopify for using an external service. This is designed to cover the costs of maintaining the integrations with those third‑party systems.

If you are on the Basic Shopify plan and use a third‑party gateway, you will pay an extra 2.0% on every order. On the Shopify plan, it is 1.0%. On the Advanced plan, it is 0.5%. For high‑volume stores, these percentages can add up to thousands of dollars per month.

Action Summary: Optimizing Your Costs

• Review your current Shopify plan and the associated processing rates.
• Calculate the total cost of any third‑party gateway, including the extra 0.5%–2.0% fee.
• If your volume is high, consider upgrading your Shopify plan to lower your rates.
• Check if you are eligible for the native gateway to eliminate the third‑party surcharge.

Payment Methods and Accelerated Checkouts

A payment gateway is the "engine," but payment methods are what the customer actually sees. Shopify supports a wide variety of methods to ensure you don't lose a sale at the final step.

Major Credit and Debit Cards

By default, most gateways allow you to accept Visa, Mastercard, American Express, and Discover. Some regions also support local card networks. It is essential to ensure your gateway covers the brands your customers use most.

Digital Wallets

Digital wallets like Apple Pay, Google Pay, and Meta Pay are increasingly popular. They allow for one‑touch payments on mobile devices. These are often referred to as "accelerated checkouts" because they bypass several steps in the traditional checkout flow.

Buy Now, Pay Later (BNPL)

Services like Klarna, Afterpay, and Affirm allow customers to pay in installments. These can significantly increase the average order value (AOV) for clothing and electronics stores. Integrating these usually involves adding them as an additional payment method through your Shopify admin.

Customizing the Checkout Experience with HidePay

Once you have chosen your gateways, the next challenge is how to present them. Showing too many options can overwhelm a customer. Showing the wrong options can lead to failed payments or high fees for the merchant.

Our app, HidePay, gives you precise control over this part of the checkout. Instead of showing every enabled payment method to every customer, you can create rules to filter and organize them. This ensures the customer only sees the most relevant and profitable options for their specific order. For a full overview of how HidePay works, see our article Introducing HidePay for Shopify.

Hiding Payment Methods Based on Rules

Not every payment method is appropriate for every order. For example, if you offer Cash on Delivery (COD), you may want to restrict it to specific zip codes or order totals. Accepting COD for a $2,000 order is a high risk for most businesses.

With our tool, you can hide payment methods based on:

• Geography: Hide specific options for certain countries or provinces. See the help guide on organizing payment methods by country for step‑by‑step instructions.
• Order Total: Only show BNPL options for orders over a certain amount; learn how to use cart total rules in the HidePay docs.
• Customer Tags: Provide specific payment terms for B2B or wholesale customers.
• Products in Cart: Hide certain gateways for fragile or high‑risk items; follow the guide on hiding payment methods for certain products to set this up.

Sorting and Renaming for Better UX

The order in which payment methods appear affects which one a customer chooses. Most merchants want to push their preferred (or lowest‑cost) gateway to the top. You can use the app to reorder the list, ensuring your primary credit card option is always first. The HidePay help video shows how to hide, sort, or rename payment methods.

Renaming is equally powerful. Sometimes the default name of a gateway is confusing. You can rename "Shopify Payments" to "Credit / Debit Card (Secure)" to make it clearer for the customer. This small change in labeling can improve trust and reduce hesitation at the final click.

Local Payment Methods for International Selling

If you sell globally, you must cater to local preferences. A customer in the Netherlands may prefer using iDEAL, while a customer in Belgium likely looks for Bancontact. If these options are missing, abandonment rates will spike.

Shopify Payments includes many of these local methods automatically based on the customer's region. However, managing them can be complex. You may want to hide high‑fee local methods for low‑value orders. Using a tool to manage these rules allows you to scale internationally without losing control over your margins. For a merchant perspective and rollout notes, read our blog post about HideSuite and combining HidePay + HideShip.

Preventing Chargebacks and Fraud

Some payment methods are more prone to chargebacks than others. Digital products are often targeted by fraudsters using specific gateways. By using logic‑based rules, you can hide the most vulnerable payment methods for digital items while keeping them active for physical goods. This protects your business from unnecessary disputes.

The Role of Shopify Functions

The technical landscape of Shopify has changed. Previously, merchants used "Shopify Scripts" to modify the checkout. This required a Shopify Plus subscription and complex coding. Shopify has since moved toward Shopify Functions.

Our app is built on native Shopify Functions. This is a major benefit for merchants because the logic runs directly within Shopify’s infrastructure. There are no external scripts or theme code edits required. This makes the checkout faster, more stable, and accessible to all merchants, not just those on the Plus plan. It is a "Built for Shopify" certified solution, meaning it meets the platform's highest standards for performance and security. For a deeper look at HidePay's performance and why Functions matter, see the HidePay product page on our site.

Key Takeaway: The Value of Native Performance

• Faster load times compared to old script‑based methods.
• Better compatibility with future Shopify updates.
• Easier setup without needing a developer.
• Available for all Shopify plans.

How to Set Up Your Payment Gateway

Setting up or changing your payment gateway is done within the Shopify admin under the "Payments" section. The process is generally straightforward.

1. Select a Provider: Choose between the native gateway or a third‑party provider.
2. Provide Credentials: For third‑party services, you will need an account ID and a secret key provided by that company.
3. Activate Test Mode: Always test your setup before going live. This allows you to simulate a transaction without charging a real card.
4. Configure Additional Methods: Enable digital wallets and BNPL services to give customers more choice.
5. Set Up Rules: Use our app to hide or sort these methods to optimize the final checkout view; follow our step‑by‑step guide for creating payment customizations in the Help Center.

FAQ

Does Shopify have its own payment gateway?

Yes, it is called Shopify Payments. It allows you to accept major credit cards and digital wallets natively. It is integrated directly into the admin, so you don't need a separate account to manage your funds.

Can I use PayPal and Shopify Payments at the same time?

Yes, most merchants use both. Shopify Payments handles the credit card transactions, while PayPal provides a familiar alternative for shoppers who prefer using their PayPal balance or saved credentials.

Why does Shopify charge an extra transaction fee?

Shopify charges this fee (0.5%–2.0%) when you use a third‑party gateway instead of Shopify Payments. This fee helps cover the maintenance of the integrations required to make external gateways work on the platform.

How do I hide a payment method for a specific country?

Shopify does not offer this feature natively in the basic settings. You can use HidePay to create a rule that hides specific gateways based on the customer’s shipping address or country; see the HidePay tutorial on creating a payment customization for exact steps.

Conclusion

The payment gateway Shopify uses by default is Shopify Payments, but the platform offers the flexibility to use over 100 other providers. Choosing the right one involves balancing processing rates, transaction fees, and the specific needs of your customers. For most, the native gateway provides the best value and the most features.

Once your gateways are active, the next step is optimization. A cluttered checkout leads to lost sales. By using the right logic to hide, sort, and rename your payment options, you can create a smoother experience for your buyers and protect your bottom line. If you want to learn more about HidePay features and tutorials, visit our product site for an in‑depth guide.

Ready to take full control of your checkout experience? Get HidePay for your store on the Shopify App Store and start optimizing your payment methods today.