Shopify Payments vs PayPal: Fees, Payouts & Holds Compared

For most stores, the best answer to Shopify Payments vs PayPal is to offer both. Shopify Payments is cheaper per card sale and keeps checkout native. PayPal converts buyers who don't want to type a card number. Run Shopify Payments as your main processor and add PayPal as a second button.

That's the short version. The details matter, though, because fees, payout timing and dispute handling differ in ways that hit your cash flow. Below, you'll see how the two compare, where each one bites, and how to set them up without overpaying.

Shopify Payments vs PayPal: Quick Comparison

Shopify Payments is Shopify's built-in card processor, powered by Stripe. PayPal is a separate wallet and processor with its own buyer base. Both work on Shopify, but they charge differently and treat your money differently.

Factor	Shopify Payments	PayPal
Typical US online card rate	About 2.9% + 30¢ on Basic, dropping to 2.4% + 30¢ on Advanced (per Shopify's pricing page)	About 3.49% + 49¢ for standard checkout (per PayPal's merchant fees page)
Third-party gateway fee	None	Shopify's third-party transaction fee (0.6%–2% depending on plan) applies to gateways other than Shopify Payments; check your store's checkout settings to see how PayPal orders are treated on your plan
Payout speed	Usually 2 business days in the US	Instant to your PayPal balance, then a transfer to your bank
Dispute handling	Managed inside Shopify admin	Managed in the PayPal resolution center
Buyer experience	Card, Apple Pay, Google Pay, Shop Pay	One-click for buyers with a PayPal login
Hold risk	Payout reviews for new or high-risk stores	Reserves and account holds are common

Fees change, and they vary by country and plan. Check Shopify's pricing page and PayPal's merchant fee schedule before you commit. For a plan-by-plan view, see our breakdown of Shopify payment gateway charges.

Shopify Payments vs PayPal Fees: What You'll Actually Pay

Shopify Payments is almost always cheaper for card sales. Two things drive the gap: PayPal's higher base rate, and Shopify's third-party transaction fee, which applies to orders paid through external gateways. PayPal Express Checkout is the nuance. Shopify treats PayPal as a supported wallet in checkout, so the third-party fee generally isn't the main concern for PayPal orders, but your plan and region can change that. Confirm it in Shopify's Payments help center and in your own transaction reports. Either way, PayPal's own rate is still higher than Shopify Payments.

One more detail: the 3.49% + 49¢ rate is PayPal's standard checkout rate. PayPal Express Checkout buttons are usually priced under PayPal's separate "PayPal checkout" rate, which can differ from standard card processing and from the rate on cards entered through PayPal's own card fields. In the examples below we use 3.49% + 49¢ for all PayPal orders, so treat the numbers as a reasonable estimate and swap in the rate on your own PayPal account.

The math on a $60 order

Take a $60 order on Shopify's Basic plan. Through Shopify Payments, the fee is roughly $2.04 (2.9% of $60 is $1.74, plus 30¢). Through PayPal, the fee is roughly $2.58 (3.49% of $60 is $2.09, plus 49¢). That's about 54¢ more per order, or $540 more on 1,000 orders a year.

PayPal also adds a currency conversion spread on international sales, which its fee schedule lists as a percentage above the base exchange rate (historically in the 3–4% range, but check the current figure for your currency). If you sell across borders, that quietly erodes margin.

A worked example: a $25,000 a month store

Picture a candle shop averaging a $50 order and 500 orders a month, so $25,000 in monthly sales. Using the rates above on a $50 order:

• Shopify Payments card order: 2.9% of $50 is $1.45, plus 30¢, so $1.75.
• PayPal order: 3.49% of $50 is $1.75, plus 49¢, so $2.24.
• Gap per order: $0.49.

If 70% of buyers pay by card (350 orders) and 30% by PayPal (150 orders), monthly fees are 350 × $1.75 = $612.50 plus 150 × $2.24 = $336, for about $949 a month. Moving 10 points of PayPal share (50 orders) to cards saves 50 × $0.49 = about $25 a month, or $294 a year. A PayPal-only store paying $2.24 on all 500 orders would spend $1,120 a month, versus $875 a month if all 500 went through Shopify Payments. That's a $245 monthly gap, or $2,940 a year. This is an illustrative model, not a real merchant case, so plug in your own order values and mix.

PayPal fees for online store owners: the hidden extras

• Fixed fee per transaction: The 49¢ hurts small-ticket stores. On a $15 order it's over 3% by itself.
• Dispute fees: PayPal's fee schedule lists a chargeback fee of $20 per dispute in the US (confirm the current amount for your currency), and you may not get it back even if you win.
• Withdrawal fees: Standard bank transfers are free, while instant transfers carry a percentage fee with a cap. PayPal's fee page lists the current rate, which has been around 1.5%.
• Shopify's extra charge: If you use a non-Shopify gateway as your main processor, the third-party fee applies on top of the processor's own fee. You can see the full picture in our guide to Shopify hidden costs.

Shopify Payments Payout Schedule vs PayPal Access to Funds

Shopify Payments pays out on a rolling schedule, typically two business days after a sale in the US. PayPal credits your balance immediately, but moving that money to your bank takes one to three business days unless you pay for instant transfer.

How the Shopify Payments payout schedule works

Payouts are automatic and go to your linked bank account. Shopify says new stores may have a longer initial payout schedule, and it can delay payouts when it flags unusual volume or a risk signal. Your payout settings and any holds are visible under Finances in your admin, and Shopify's payout documentation lists the current timelines for your country. You can usually change payout frequency to daily, weekly or monthly once your account is established, which helps with bookkeeping and cash planning.

How PayPal handles your money

PayPal's speed is real, but the balance isn't truly yours until it clears risk checks. A sudden spike in sales, a first big order, or tracking numbers that don't upload can all trigger a review.

The practical takeaway: neither processor is a bank. Keep 2–4 weeks of operating cash outside your payment balances, especially if you run ads with fixed daily budgets. Say you spend $200 a day on ads and your payouts freeze for ten days. That's $2,000 of spend with no incoming cash to restock.

Disputes, Chargebacks and PayPal Account Holds

Both processors can freeze money, but PayPal does it more often and with less warning. Shopify Payments handles disputes inside your admin and gives you a deadline to submit evidence. PayPal runs its own buyer-protection process, which tends to favor the buyer.

Shopify Payments disputes and chargebacks

When a customer disputes a charge, Shopify withdraws the amount plus a dispute fee and gives you a window to respond with evidence. The US fee has been listed at $15, though it varies by country and can change, so verify it in your admin. If you win, the order amount returns, and in many cases the fee does too, depending on the outcome. Keep shipping confirmations, customer emails and product descriptions ready. Our source for current dispute rules is Shopify's chargeback guide.

PayPal account hold on Shopify stores

A PayPal account hold usually happens when your sales jump, you ship late, you sell high-risk or digital goods, or your dispute rate rises. PayPal's user agreement describes holds that can last up to 21 days after a transaction, with longer periods possible in some cases, and it allows rolling reserves. Without a cash buffer, a hold can stall restocking. For example, a $10,000 reserve on a store doing $30,000 a month removes a third of your working capital overnight. Read the "holds" and "reserves" sections of PayPal's user agreement so you know exactly what applies to your account.

To reduce hold risk:

1. Upload tracking numbers to PayPal promptly.
2. Ramp volume gradually, and warn support before a big launch.
3. Use a verified business account with matching legal and bank details.
4. Respond to every dispute inside the stated deadline.
5. Keep your refund policy visible at checkout.

Should You Use Both PayPal and Shopify Payments?

Yes, in most cases. You can use both PayPal and Shopify Payments at the same checkout, and offering both removes friction for different buyer types. Shopify Payments handles cards and wallets, while PayPal Express Checkout catches shoppers who prefer their PayPal login.

PayPal Express Checkout on Shopify

PayPal Express Checkout adds a yellow PayPal button on the cart and checkout. Buyers skip typing address and card details because PayPal passes them through. It's particularly helpful on mobile, where typing is painful. Because PayPal is enabled by default on many Shopify stores, check that your account is connected and verified before launch.

When to pick one or the other

• Shopify Payments only: Good if you sell domestically, want the lowest fees and a single dashboard.
• PayPal only: Rarely smart. You lose Shop Pay, Apple Pay and lower rates.
• Both: Best for most. Shoppers choose the method they trust, and if one processor freezes your account, the other keeps revenue flowing.

Not every country supports Shopify Payments. If you're outside a supported region, PayPal or Stripe through another gateway may be your only practical route. Our guide to the best payment gateway for a small online store covers those alternatives, and adding PayPal to an online store walks through setup step by step.

Is There a Way to Skip the Payment Fee Maze?

Partly. Processing fees from Stripe or PayPal never disappear, since someone has to move the money. What you can drop is the platform's extra cut on top. On Shopify, that means the third-party gateway surcharge when you use an outside processor, and the paid apps you need for things like abandoned cart recovery.

Rovela takes a different route. Stores use Stripe checkout with PayPal available as an integration, a flat subscription, and no commission on sales. The 100+ built-in features, including abandoned cart and reviews, mean you aren't stacking app bills on top of payment fees. Rovela's own estimate is that merchants can save $5,000+ a year compared with previous platform and app costs. That's a company figure, and it assumes a store that was paying for several apps, so add up your own current bills before counting on it. For a wider cost view, read what Shopify really costs in 2026.

Final Verdict: Shopify Payments or PayPal?

Pick Shopify Payments as your primary processor and add PayPal Express Checkout as the second option. You'll pay lower fees, get faster bank deposits and manage disputes in one place, while still capturing buyers who trust PayPal.

Here's the action list:

1. Activate Shopify Payments if your country supports it.
2. Add PayPal as a secondary method, then test a real order end to end.
3. Check a few PayPal orders in your reports to confirm the fees you're actually charged.
4. Keep two to four weeks of cash outside both balances.
5. Upload tracking quickly and answer disputes inside the deadline.
6. Review your fees every quarter against your actual order values.

If you're tired of paying a platform fee, a processor fee and a stack of app fees, Rovela builds a complete store from a chat, with Stripe checkout and 100+ features included. Take a look at Rovela's pricing or see how it stacks up in Rovela vs Shopify.