Shopify Payments vs Third-Party Payment Gateways: Which to Choose?

When starting an online store, one common decision is whether to use Shopify Payments or connect a third-party payment gateway (like Stripe, PayPal, Adyen, or a local provider). Both approaches let you accept payments, but they differ in setup, cost, features, and international capabilities. This article explains the differences in beginner-friendly terms and offers guidance on choosing the right path for your business.

Core differences at a glance

• Integration and convenience: Shopify Payments is built into Shopify, so setup is usually quicker and reconciliation is simpler because orders and payments live in the same system. Third-party gateways require additional accounts and configuration, but may offer features not supported natively by Shopify Payments.
• Fees: Shopify Payments charges processing fees per transaction. Using a third-party gateway may incur both the gateway’s fees and an extra Shopify transaction fee unless you are on select Shopify plans that waive that surcharge.
• Availability: Shopify Payments is only available in certain countries. Third-party gateways cover more regions and can support specific local payment methods where Shopify Payments is not available.
• Feature set: Third-party gateways can provide specialized services like advanced fraud tools, multi-merchant support, marketplace splits, or complex payment flows that Shopify Payments doesn’t natively support.

When Shopify Payments is the better choice

• You want a simple setup: For beginners who want a quick, low-friction launch, Shopify Payments reduces paperwork and centralizes reporting.
• You value consolidated reporting: Transactions, refunds, and fees are displayed directly in Shopify admin, making reconciliation easier.
• You’re in a supported country: If Shopify Payments is available for your business location and supports the currencies you need, it’s often the most straightforward option.

When a third-party gateway might be better

• Regional or currency coverage: If you sell in countries where Shopify Payments isn’t available or you need local payment methods (bank transfers, specific wallets), a third-party gateway may be necessary.
• Advanced features: Marketplaces, split payments, in-depth fraud management, or complex subscription billing may be better handled by specialized gateways with dedicated features.
• Account portability: If you want to keep your payment processing separate from Shopify for flexibility or redundancy, a third-party gateway provides that separation.

Cost comparison considerations

• Shopify Payments processing fees are transparent and often competitive, but they vary by plan and region.
• Third-party gateways charge processing fees and possibly monthly or setup fees; additionally, Shopify can charge transaction fees for the use of external gateways unless you’re on a plan that waives them.
• Always calculate total per-transaction cost: card processor fee + gateway fee + potential Shopify external gateway fee.

Performance, risk, and support

• Uptime and performance: Both Shopify Payments and established gateways tend to have strong uptime, but local providers may sometimes offer better local routing and performance.
• Risk and underwriting: Payment processors monitor merchants for fraud. Some third-party gateways are more flexible with high-risk industries, while Shopify Payments enforces Shopify’s policies and may restrict certain categories.
• Support: With Shopify Payments, Shopify support can help troubleshoot payment issues within the platform. With a third-party gateway you’ll coordinate between the gateway and Shopify support for issues spanning both systems.

Practical examples to illustrate choices

• Example A — Local artisan in supported country: A small crafts business in a country where Shopify Payments is available chooses Shopify Payments for simplicity, faster reconciliation, and no need for extra accounts.
• Example B — International marketplace: A marketplace that needs to split payments between sellers and supports many local payout methods uses a specialized gateway or payment provider that supports marketplace payouts.
• Example C — Merchant selling regulated products: A retailer in a restricted category checks third-party gateways known to support their vertical; some processors specialize in higher-risk merchant underwriting.

Decision checklist

1. Is Shopify Payments available in your country? If no, choose a gateway that serves your market.
2. Do you need specialized features (marketplace payments, advanced subscriptions, specific local methods)? If yes, evaluate gateways with those capabilities.
3. Compare total transaction costs, including any Shopify external gateway fees.
4. Consider support and reconciliation needs—do you prefer everything in one place (Shopify Payments) or separate systems?
5. Review restrictions and acceptable use policies for your product category.

Final friendly advice

For many beginners the fastest, easiest path is Shopify Payments when it’s available — it minimizes setup friction and makes bookkeeping simpler. As your business grows or has specialized needs, you can evaluate third-party gateways and migrate if necessary. Start with what reduces complexity today, and revisit the decision as your sales volume, international reach, or product mix evolves.