“PayPal is basically the same price as Shopify Payments.” Founders tell me this all the time, and on Basic it’s usually wrong by about $1,500 a month. The gap isn’t PayPal’s rate. It’s the 2% Shopify adds on top of it.
My position: on a US store that can use Shopify Payments, offer PayPal as a wallet if your customers want it, but never let it run as your main card processor. Below is the side-by-side math on the same sales, by plan, and the one situation where PayPal pulls its weight.
To check your own plan and volume, use the PayPal vs Shopify Payments fee calculator.
What you are actually comparing
- Shopify Payments path: Shopify’s card rate for your plan, and no third-party fee.
- PayPal path: PayPal’s checkout fee, plus Shopify’s third-party transaction fee on every order processed outside Shopify Payments.
If you leave out the second line on the PayPal side, PayPal looks competitive. It’s in the bill, though.
Worked example: $68,000 a month on Basic
Say a store averages $85 per order and does 800 orders a month.
| Shopify Payments | PayPal + Shopify 2% | |
|---|---|---|
| Rate | 2.9% + $0.30 | 2.99% + $0.49, plus 2% |
| Per order | $2.77 | $4.73 |
| Per month | $2,212 | $3,785 |
The difference is $1,573 a month, nearly $19,000 a year. About $1.70 per order of that is Shopify’s surcharge alone. PayPal’s slightly higher rate is a rounding error by comparison.
How the gap changes
- Higher AOV ($150, same 800 orders): $3,720 vs $6,380, so the gap grows to $2,660/mo. The percentages dominate as AOV rises.
- Advanced plan (0.6% surcharge): $1,940 vs $2,833, a gap of $893/mo. It’s smaller but still there.
- More volume (1,500 orders at $85): $4,148 vs $7,097, a gap of $2,950/mo. The gap grows in step with volume and never reverses.
Getting busier never makes PayPal the cheaper option. Only a changed plan tier or a negotiated PayPal rate can do that.
Where PayPal still earns its place
PayPal isn’t the problem. Running cards through it is. Keep it as an option when:
- Your audience actually chooses it. Check how many orders arrive via the PayPal wallet, and how much of that is international or older buyers.
- Shopify Payments isn’t available for your country or business, so a third-party processor is unavoidable anyway.
- You have a negotiated PayPal rate that, combined with your plan’s surcharge, still beats Shopify Payments. That is rare below Advanced.
What I’d do
- Find out what share of last month’s orders went through PayPal (Orders → filter by payment gateway). If it’s under 10–15%, those orders cost you extra while bringing in very little.
- Make Shopify Payments the default card processor and keep the PayPal wallet as a secondary button. Most card buyers never notice the change.
- Put your plan, AOV and orders into the calculator using your real PayPal rate, then decide with that number in front of you.
For every fee on every plan, see Shopify transaction fees explained.
Work with me
I’m Faraz, a Shopify and AI automation consultant. I audit payment setups and checkout flows so stores stop paying fees they don’t need to. farazhussain.com · WhatsApp +92 334 3454747.
Rates are approximate 2026 US list prices and vary by region, card type and account. This is planning math, not an invoice.