Best Payment Gateway for Shopify: Top Providers Compared

Introduction

Choosing the right payment gateway determines your store's profit margins and your checkout conversion rate. The best payment gateway for Shopify is the one that balances low transaction fees with the specific local payment methods your customers prefer. While most merchants begin with a standard setup, scaling globally requires a more nuanced approach to how payments are displayed and managed.

We built HidePay to give merchants precise control over this critical part of the customer journey. Finding a provider is the first step, but managing how those options appear based on geography, cart value, or customer type is how you truly optimize a store. If you want to get started quickly, you can install HidePay on the Shopify App Store and begin creating rules for your checkout.

We will cover the technical differences between hosted and non-hosted gateways, the fee structures of major providers, and how to use rules to protect your margins. This guide is for active merchants who need to reduce friction and eliminate unnecessary processing costs at checkout.

Understanding the Shopify Payment Ecosystem

Shopify handles billions of dollars in transactions by acting as the bridge between your online store and various payment processors. Before selecting a gateway, you must understand the two primary ways Shopify categorizes these services.

Shopify Payments vs. Third-Party Providers

Shopify Payments is the platform’s native solution. It is powered by Stripe but integrated directly into your Shopify admin. When you use it, you avoid the additional "third-party transaction fees" that Shopify charges on every sale. These fees range from 0.5% to 2% depending on your Shopify plan.

Third-party providers are external companies like PayPal, Authorize.net, or Worldpay. If you choose an external provider as your primary gateway, you will pay that provider’s credit card processing fee plus the Shopify transaction fee. This is a significant consideration for high-volume stores where a 1% difference in fees can equate to thousands of dollars in lost monthly profit.

For background reading on how HidePay helps organize payment methods by region and market, see our HidePay introduction and use cases on the Nextools blog.

Hosted vs. Non-Hosted Gateways

The technical setup of your gateway impacts the user experience.

• Hosted Gateways: These redirect customers away from your site to the processor's website (like the classic PayPal redirect). Once the payment is complete, the customer is sent back to your confirmation page.
• Non-Hosted (Integrated) Gateways: These allow customers to enter their credit card information directly on your checkout page. This creates a more professional look and keeps the user within your brand environment.

Top Payment Gateways for Shopify in 2024

Selecting a gateway requires looking at your specific region and the regions of your customers. Here is a breakdown of the most reliable options currently available.

1. Shopify Payments

For the majority of merchants in supported countries, Shopify Payments is the most logical choice. It eliminates extra transaction fees and provides a unified dashboard for payouts and chargeback management.

• Best for: Merchants in the US, UK, Canada, Australia, and parts of Europe/Asia who want the lowest fees and simplest setup.
• Key Advantage: It allows you to use Shop Pay, which is one of the fastest accelerated checkout methods available.
• The Bottom Line: If it is available in your country and your products do not fall into "high-risk" categories, this should be your primary gateway.

2. Stripe

While Stripe powers Shopify Payments, some merchants choose to use Stripe as a standalone third-party gateway. This is common for businesses with complex needs or those operating in regions where Shopify Payments hasn't launched.

• Best for: Tech-forward brands and subscription-based businesses.
• Key Advantage: Exceptional documentation and support for recurring billing models.
• The Bottom Line: Use Stripe if you need high levels of customization or specific subscription features that the native Shopify setup doesn't handle natively.

3. PayPal

PayPal is almost mandatory for international e-commerce. Many customers feel more secure using their PayPal balance or stored credentials than entering a credit card on a new site.

• Best for: Stores with a global customer base.
• Key Advantage: Extremely high trust levels and "one-click" checkout via PayPal Express.
• The Bottom Line: You should almost always offer PayPal as a secondary option alongside your primary credit card processor.

4. Authorize.net

As one of the oldest names in the industry, Authorize.net is a "veteran" gateway. It is known for its reliability and its ability to work with many different merchant banks.

• Best for: Larger enterprises or merchants who have been denied by Shopify Payments or Stripe.
• Key Advantage: Highly robust fraud detection suites and excellent 24/7 support.
• The Bottom Line: It is a reliable fallback if you have a pre-existing merchant account with a bank that you want to keep.

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

Klarna, Affirm, and Afterpay are not traditional gateways but "alternative payment methods." They allow customers to split payments into installments while you receive the full amount upfront.

• Best for: Fashion, electronics, and high-ticket home goods.
• Key Advantage: Significant increases in Average Order Value (AOV).
• The Bottom Line: Integrating at least one BNPL option is essential if your average order value exceeds $100.

How to Choose Based on Your Business Model

Your industry and location dictate which gateway will perform best. A one-size-fits-all approach often leads to abandoned carts or high processing fees.

For International Dropshippers

Dropshippers often face higher chargeback rates and scrutiny from payment processors. Using a combination of Shopify Payments (for credit cards) and PayPal (for trust) is the standard. However, you must ensure your gateway supports the currency of your target market to avoid heavy conversion fees.

If you are shipping from China to the US, for example, your gateway must be able to handle USD transactions without triggering "high-risk" flags. Some merchants use a tool to hide certain payment methods for specific high-risk countries where fraud is more common, ensuring they only offer the most secure options in those regions; see the help guide on organizing payment methods by country or Shopify Market for setup instructions.

For B2B and Wholesale Merchants

Wholesale orders are typically much larger than B2C orders. A 2.9% credit card fee on a $10,000 order is $290. For these transactions, you should prioritize manual payment methods like Bank Transfers or ACH.

You can set rules to display these manual options only when a customer has a "Wholesale" tag or when the cart total exceeds a certain threshold. This protects your margins by steering high-value customers away from expensive credit card processing.

For Subscription Services

Subscription billing requires a gateway that can securely store "vaulted" credit card information and charge it on a recurring basis. Stripe and Shopify Payments are the leaders here. If you use a third-party gateway for subscriptions, verify that it supports "tokenization," which is the process of replacing sensitive data with a non-sensitive equivalent.

Optimizing the Checkout Experience

Once you have selected your gateways, the work isn't finished. How you present these options to the customer is just as important as the providers themselves.

Sorting for Better Conversion

The order in which payment methods appear matters. Most customers scan the checkout page from top to bottom. By placing your most trusted or lowest-fee options at the top, you guide the customer toward a successful transaction. If a merchant prefers customers to use Shop Pay over PayPal because the fees are lower, they can use a tool to move Shop Pay to the top of the list.

If you want step-by-step instructions for reordering and renaming payment methods, consult the help article on sorting and renaming payment methods in the checkout.

Renaming for Clarity

Sometimes the default names provided by gateways are confusing. For example, instead of just "Direct Bank Transfer," you might rename it to "Bank Transfer (5% Discount)" to encourage a lower-fee payment method. Or, if you are selling in a specific region, you might rename a generic gateway to a local name that residents recognize.

Hiding Redundant Options

Offering too many choices leads to "analysis paralysis." If you have Shopify Payments, PayPal, Amazon Pay, and Apple Pay all active, your checkout can look cluttered.

A cleaner checkout converts better. You should use rules to hide certain methods based on the customer's device. For instance, there is no reason to show Apple Pay to a customer browsing on a Windows desktop. Similarly, you can hide "Cash on Delivery" for any order that contains a digital download or an international shipping address.

If you need help identifying the exact payment method names to target in rules, the support guide on retrieving the correct payment method via logs explains how to capture the right identifiers.

Protecting Your Bottom Line

Payment gateways are not just about taking money; they are about risk management.

Reducing Chargeback Risk

Some payment methods are more prone to chargebacks than others. Digital wallets like Apple Pay and Google Pay often have lower dispute rates because they use biometric authentication. In contrast, "Buy Now, Pay Later" options can sometimes lead to disputes if the customer regrets the purchase later.

If you notice a specific region has a high chargeback rate for credit cards, you can set a rule to only show PayPal or other more secure methods for those specific zip codes. This allows you to keep selling in that region without exposing yourself to unnecessary risk.

Avoiding High Fees

In certain countries, "Cash on Delivery" (COD) is a popular but expensive option for merchants due to the high rate of refused packages. Using HidePay, you can set a rule to only show COD for customers with a history of successful orders (using customer tags) or for orders under a certain dollar amount.

The Technical Advantage of Shopify Functions

In the past, merchants had to use "Shopify Scripts" to customize their checkout. This required a Shopify Plus account and knowledge of the Ruby programming language. Today, Shopify has moved toward Shopify Functions.

Our app is built natively on Shopify Functions. This means the rules you create run directly within Shopify's core infrastructure. There are several benefits to this:

1. Speed: Because the logic runs on Shopify’s servers, there is no delay at checkout.
2. Reliability: Unlike old theme-code hacks or scripts, Functions don't break when Shopify updates its checkout UI.
3. Compatibility: It works perfectly with the new "Checkout Extensibility" that Shopify is rolling out to all merchants.

If you want to migrate legacy Scripts or generate functions without coding, consider Nextools' SupaEasy app for creating and migrating Shopify Functions.

Action Steps for Merchants

1. Audit your current fees: Look at your last month of payouts. Calculate how much you paid in third-party transaction fees vs. credit card processing fees.
2. Enable Shopify Payments: If you aren't using it and it's available, switch to it immediately to save on the transaction fee.
3. Identify "High-Cost" Methods: Determine which payment methods result in the most chargebacks or highest processing costs.
4. Implement Rules: Use a tool to sort your preferred methods to the top and hide expensive or risky methods for specific customer segments.

For implementation and advanced rule examples, browse the full set of HidePay help documentation.

Conclusion

The best payment gateway for Shopify is rarely a single provider. For most successful stores, it is a combination of Shopify Payments for local credit card processing and PayPal for international trust. However, the real "best" setup is one that is dynamic.

Your checkout should look different for a wholesale buyer in New York than it does for a first-time shopper in London. By controlling which payment methods appear based on geography, order value, and risk, you protect your margins and improve the customer experience.

• Prioritize Shopify Payments to eliminate extra transaction fees.
• Add PayPal and at least one BNPL option to increase conversion.
• Use rules to hide high-risk options in specific regions.
• Sort your lowest-fee methods to the top of the list.

Ready to take full control of your checkout? You can get HidePay for your store from the Shopify App Store and start optimizing payment methods today.

FAQ

Does Shopify Payments charge a transaction fee?

If you use Shopify Payments, Shopify waives the "third-party transaction fee" (0.5%–2%) that usually applies to other gateways. You still pay the standard credit card processing fee, but you avoid the extra penalty for using an external provider.

Can I use multiple payment gateways at once?

Yes, you can use Shopify Payments as your primary credit card processor while also offering "Accelerated Checkouts" like PayPal, Amazon Pay, and Apple Pay. You can also add alternative methods like Klarna or manual methods like Bank Transfers.

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

Shopify doesn't allow you to hide payment methods by country natively in the admin settings. You must use an app like HidePay, which uses Shopify Functions to detect the customer's shipping address and hide or show specific payment options based on that location; see the guide on organizing payment methods by country or Shopify Market for details.