Shopify Payments: 2.9% + 30 cents. Stripe: 2.9% + 30 cents. PayPal: 3.49% + 49 cents. Those are the base rates for domestic online transactions in 2026. But base rates are just the starting point. International fees, currency conversion, Shopify's third-party gateway surcharge, and volume discounts change the real math significantly.
I've seen store owners lose 1-2% of revenue just by picking the wrong payment setup. On $500K in annual sales, that's $5,000-$10,000 left on the table. Here's how each processor actually works and what you'll pay.
Fee Comparison: Domestic Online Transactions
Let's start with the simplest scenario: a U.S. customer paying with a U.S. credit card on your online store.
| Processor | Rate (% + flat fee) | Cost on $50 Sale | Cost on $100 Sale |
|---|---|---|---|
| Shopify Payments (Basic) | 2.9% + $0.30 | $1.75 | $3.20 |
| Shopify Payments (Shopify) | 2.7% + $0.30 | $1.65 | $3.00 |
| Shopify Payments (Advanced) | 2.5% + $0.30 | $1.55 | $2.80 |
| Stripe | 2.9% + $0.30 | $1.75 | $3.20 |
| PayPal (Card Payments) | 2.99% + $0.49 | $1.99 | $3.48 |
| PayPal (Checkout) | 3.49% + $0.49 | $2.24 | $3.98 |
PayPal is the most expensive option for every transaction size. The higher percentage rate plus the larger flat fee ($0.49 vs. $0.30) compounds quickly. On a $100 order through PayPal Checkout, you pay $3.98 compared to $3.20 through Shopify Payments (Basic) or Stripe. That's 24% more in fees.
The flat fee matters more than most people realize for low-ticket items. On a $10 sale, the flat fee alone represents 3-5% of the transaction. If your average order value is under $30, PayPal's $0.49 flat fee is a meaningful margin hit compared to Stripe's $0.30.
The Shopify Third-Party Gateway Tax
This is where Shopify gets you. Big time.
If you use any payment processor other than Shopify Payments (like Stripe or PayPal), Shopify charges an additional transaction fee on every sale:
| Shopify Plan | Monthly Cost | Third-Party Gateway Fee |
|---|---|---|
| Basic ($39/mo) | $39 | 2.0% |
| Shopify ($105/mo) | $105 | 1.0% |
| Advanced ($399/mo) | $399 | 0.5% |
Here's what that means in practice. If you're on Shopify's Basic plan and use Stripe as your payment gateway, your total fee per domestic transaction is: 2.9% (Stripe) + $0.30 (Stripe) + 2.0% (Shopify surcharge) = 4.9% + $0.30.
On a $100 sale, that's $5.20. Compare that to $3.20 using Shopify Payments. A $2.00 difference per transaction.
I honestly think this is Shopify's most underappreciated hidden cost. Most founders pick Stripe because they know it, then don't realize they're paying a 2% penalty on every sale for not using Shopify Payments. If you're on Shopify, there's almost no reason not to use Shopify Payments as your primary gateway.
International Transaction Fees
Selling to customers outside your country? The fees jump. Every processor adds surcharges for international cards and currency conversion.
| Fee Type | Shopify Payments | Stripe | PayPal |
|---|---|---|---|
| International card surcharge | +1.0% | +1.5% | +1.5% |
| Currency conversion | +1.5% | +1.0% | +3-4% (built into exchange rate) |
| Total on $100 intl sale (Basic) | $5.40 | $5.70 | $7.48+ |
PayPal's currency conversion is where they really make their money. Instead of charging a transparent percentage fee, PayPal builds a 3-4% spread into their exchange rate. The customer doesn't see it as a fee, but it's there. On international sales through PayPal Checkout, your total effective fee can approach 7-8%.
Shopify Payments has the lowest international card surcharge at 1.0%(vs. 1.5% for Stripe and PayPal). But Shopify's currency conversion fee is 1.5%, slightly higher than Stripe's 1.0%. If you sell internationally in your own currency (no conversion needed), Shopify Payments wins. If you sell in local currencies, the difference is minimal.
How much are payment processing fees eating your profit?
Plug in your AOV, monthly volume, and fee structure to see the exact dollar impact on your bottom line.
Open Shopify Profit Calculator →Annual Cost Comparison by Revenue Level
Base rates are one thing. Let's look at what you actually pay over a year at different revenue levels, assuming all domestic transactions and average order value of $65.
| Annual Revenue | Shopify Payments (Basic) | Stripe (on Shopify Basic) | PayPal Checkout (on Shopify Basic) |
|---|---|---|---|
| $100K | $3,362 | $5,362 (incl. 2% surcharge) | $6,243 (incl. 2% surcharge) |
| $250K | $8,404 | $13,404 | $15,358 |
| $500K | $16,808 | $26,808 | $30,465 |
| $1M | $33,615 | $53,615 | $60,680 |
At $500K in revenue, using Stripe on Shopify (with the 2% surcharge) costs you $10,000 more per year than using Shopify Payments. Using PayPal Checkout costs you $13,657 more. That's money that goes straight to your bottom line just by switching your payment gateway.
At $1M, the gap widens to $20,000+ for Stripe and $27,000+ for PayPal. These aren't theoretical savings. They're real dollars.
When Each Processor Makes Sense
Despite the cost differences, there are legitimate reasons to use each one.
Use Shopify Payments if:
- You're on Shopify (the 0% third-party fee saves you the most money)
- Most of your customers are domestic
- You want the simplest setup with no additional accounts needed
- You want lower credit card rates on higher Shopify plans (2.5% on Advanced)
Use Stripe if:
- You're on WooCommerce, a custom platform, or any non-Shopify store
- You need advanced developer features (custom checkout flows, subscription billing, Connect for marketplaces)
- You sell internationally and want transparent, lower currency conversion fees (1% vs. PayPal's 3-4%)
Use PayPal if:
- You want to offer it as a secondary payment option (some customers prefer PayPal for buyer protection)
- You sell to markets where PayPal is the dominant payment method
- You sell on marketplaces like eBay where PayPal integration is native
My take: if you're on Shopify, use Shopify Payments as your primary gateway. Period. Add PayPal as a secondary option because some customers won't buy without it (anecdotally, offering PayPal increases conversion by 5-10% for some stores). But route the majority of transactions through Shopify Payments to avoid the surcharge.
Hidden Fees Most Sellers Miss
The base rate comparison only tells part of the story. Watch for these:
- Chargeback fees. Stripe charges $15 per chargeback. PayPal charges $20. Shopify Payments has no chargeback fee in some regions, though the disputed amount is still held.
- Payout timing. Stripe and Shopify Payments settle in 2 business days. PayPal holds funds for new sellers (sometimes 21 days). Cash flow matters.
- Refund fee retention. When you refund a customer, Stripe keeps the processing fee. PayPal refunds the percentage fee but keeps the fixed fee ($0.49). Shopify Payments keeps the full processing fee. On high-return-rate products, this adds up fast.
- Manually entered cards. Stripe adds 0.5% for manually keyed-in card numbers (phone orders, etc.).
The Real Winner Depends on Your Platform
If you're choosing a payment processor in 2026, the decision tree is actually pretty simple:
On Shopify? Use Shopify Payments. The 0% third-party fee makes it the obvious choice. Add PayPal as a secondary option only.
On WooCommerce or a custom build? Use Stripe. Best developer tools, transparent pricing, lower international fees than PayPal.
Want to offer PayPal as an option? Do it, but don't make it your primary gateway. The higher fees and worse currency conversion rates mean it should handle 10-20% of your transactions (the customers who specifically want PayPal), not all of them.
The typical online shop pays between 2% and 4% of revenue for payment processing (what.digital, 2026). If you're paying more than 4%, you probably have the wrong setup. And at scale, even small differences compound into real money.
Frequently Asked Questions
What are Shopify Payments fees in 2026?
2.9% + $0.30 per transaction on Basic, 2.7% + $0.30 on Shopify, and 2.5% + $0.30 on Advanced for domestic cards. International and Amex cards are charged 3.9% + $0.30 on Basic. No additional transaction fee for using Shopify Payments as your gateway.
Is Stripe cheaper than PayPal for ecommerce?
Yes. Stripe charges 2.9% + $0.30 vs. PayPal Checkout's 3.49% + $0.49. On a $100 sale, that's $3.20 (Stripe) vs. $3.98 (PayPal). The gap is even larger on international transactions where PayPal's currency conversion spread can add 3-4%.
Does Shopify charge extra for using Stripe or PayPal?
Yes. Shopify adds 2% (Basic), 1% (Shopify), or 0.5% (Advanced) on top of the external gateway's own fees. This surcharge only applies when you use a gateway other than Shopify Payments.
What do international payment fees look like?
All three processors add surcharges for international cards: Shopify Payments adds 1%, Stripe adds 1.5%, PayPal adds 1.5% plus a 3-4% exchange rate spread. A U.S. merchant accepting a European card through Stripe could pay 5.4% + $0.30 total.