The Two Fees, and Why People Confuse Them
Almost every complaint about Shopify "taking a cut" is really about one of these two, and they behave completely differently.
| Card processing | Third-party transaction fee | |
|---|---|---|
| Who charges it | The payment processor | Shopify |
| When it applies | Every card order, always | Only if you do not use Shopify Payments |
| Typical size | 2.5%–2.9% + 30¢ | 0.2%–2.0% |
| Avoidable? | No — every platform has one | Yes |
The first is the cost of accepting cards and exists everywhere, including on WooCommerce, BigCommerce and Etsy. The second is specific to Shopify's business model, and it is the one worth understanding properly.
Card Processing Rates by Plan
Through Shopify Payments, in the United States:
| Plan | Online | In person | On $10,000/mo, 200 orders |
|---|---|---|---|
| Basic | 2.9% + 30¢ | 2.6% + 10¢ | about $350 |
| Grow | 2.7% + 30¢ | 2.5% + 10¢ | about $330 |
| Advanced | 2.5% + 30¢ | 2.4% + 10¢ | about $310 |
| Plus | Negotiated | — | |
Rates are set per country. Canadian, British, European and Australian merchants see different numbers, and the gap between plans differs too. Check the rate for your own market rather than assuming the US figure.
Note how small the plan-to-plan difference is at this volume: $40 a month between Basic and Advanced, against a $360 difference in plan price. Upgrading for the rate alone only makes sense much higher up — see below.
The Third-Party Fee: The Avoidable One
If you process payments through anyone other than Shopify Payments — PayPal as a primary gateway, Stripe directly, Authorize.net, a regional provider — Shopify adds its own fee on top.
| Plan | Fee | On $5,000/mo | On $20,000/mo | On $50,000/mo |
|---|---|---|---|---|
| Basic | 2.0% | $100 | $400 | $1,000 |
| Grow | 1.0% | $50 | $200 | $500 |
| Advanced | 0.6% | $30 | $120 | $300 |
| Plus | 0.2% | $10 | $40 | $100 |
This is charged in addition to what your gateway charges. A merchant on Basic doing $20,000 a month through an external provider pays roughly $580 to that provider and $400 to Shopify. Switching to Shopify Payments removes the $400 outright.
PayPal is the common trap. Offering PayPal as an express checkout option alongside Shopify Payments generally does not incur the fee. Using PayPal as your primary gateway does. If you are not sure which setup you have, check your payment settings before assuming.
When the Fee Difference Justifies an Upgrade
The right way to decide is arithmetic, not feature lists. Upgrade when the fee saving exceeds the plan difference.
Basic to Grow ($66/month more)
On Shopify Payments the rate drops 0.2 points, so you need $33,000 a month in card sales for the processing saving alone to pay for it. On an external gateway the third-party fee drops a full point, so the crossover is $6,600 a month — five times sooner. Most people upgrading at $5,000–$10,000 are doing it for the five staff accounts and professional reports, which is a legitimate reason; just be clear that is the reason.
Grow to Advanced ($294/month more)
The rate drops another 0.2 points, so the processing crossover is $147,000 a month. On an external gateway the third-party fee drops 0.4 points and the crossover is $73,500. Below that, you are buying custom reports and 15 staff accounts, not saving money.
The general rule: if you use Shopify Payments, upgrade for features. If you use an external gateway, upgrade for the fee — or better, work out why you are not on Shopify Payments.
How to Pay Less
- Use Shopify Payments where it is available. Nothing else on this list comes close — and it is now worth more than the fee saving alone, because Shopify's 1% sales credits promotion also requires it. An external gateway costs you the third-party fee and forfeits up to $10,000 in subscription credits over your first six months.
- Raise average order value rather than chasing rates. The 30¢ per-transaction component is fixed, so it hurts small orders disproportionately. A $20 order pays 4.4% all-in on Basic; an $80 order pays 3.3%. Bundles, upsells and free shipping thresholds reduce your effective rate without negotiating anything.
- Take annual billing once the store is stable — 25% off the subscription side.
- Reduce chargebacks and refunds. Processing on a refunded order is not returned. Clear product photography, accurate descriptions and honest shipping estimates are a payments cost saving as much as a CX one.
- Audit your apps at the same time. Merchants who care about a 0.2% rate difference are frequently paying $150 a month for apps they no longer use.
Frequently Asked Questions
Does Shopify charge a transaction fee if I use Shopify Payments?
No. Shopify's third-party transaction fee applies only when you use a payment provider other than Shopify Payments. You still pay standard card processing — 2.9% + 30¢ on Basic in the US, down to 2.5% + 30¢ on Advanced — but no additional Shopify fee.
How much is Shopify's third-party transaction fee?
2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus. It is charged on the order value, in addition to whatever your external payment provider charges. On Basic at $10,000 per month in sales that is $200, which is more than five times the plan fee.
Does using PayPal trigger the transaction fee?
Offering PayPal as an express checkout button alongside Shopify Payments generally does not. Using PayPal as your primary payment gateway does. Check your payment settings to see which arrangement you actually have.
Why does Shopify charge a fee for using another gateway?
Shopify's pricing model subsidises the platform fee with payments revenue. When you process elsewhere, Shopify recovers some of that through the third-party fee. Whether that is reasonable is a fair debate; that it is avoidable in most countries is the practical point.
Is it worth upgrading plans just for lower fees?
Only above a clear threshold. On Shopify Payments you need roughly $33,000 per month in card sales to justify Basic to Grow on processing alone, and roughly $147,000 for Grow to Advanced. On an external gateway those crossovers fall to about $6,600 and $73,500. Below those levels you are paying for features, not savings.
Do I pay processing fees on refunded orders?
The processing fee on the original transaction is generally not returned to you when you refund a customer. This makes refund rate a direct payments cost, and it is one reason accurate product descriptions and photography pay for themselves.
💡 Ready to put this into practice? Shopify's free 3-day trial — then $1/month for 3 months, plus 1% of sales back in credits — is long enough to set it up and see the numbers. Start your free trial → (affiliate link)