Direct answer: Before you commit to a paid Shopify plan, compare the built‑in Shopify Payments fees (including any currency conversion charges) with the fees of an external gateway that supports your target market. Use a simple cost model to see which option gives the lowest total percentage of sales after fees, and factor in any extra setup or recurring costs.
1. What Shopify Payments actually costs you
Shopify Payments is available in many countries, but not all. If your store’s primary bank is in a supported country (e.g., United States, Canada, United Kingdom, Saudi Arabia, Pakistan), you can enable it directly from the admin panel. The fee structure has two parts:
- Transaction fee: a percentage of each sale that varies by plan (e.g., 2.9% + $0.30 on the Basic plan, 2.6% + $0.30 on Shopify, 2.4% + $0.30 on Advanced).
- Currency conversion fee: if you charge customers in a currency different from your bank’s settlement currency, Shopify adds a 2% conversion surcharge.
There are no additional monthly gateway fees, but you do need an active Shopify subscription to use the feature.
Referral disclosure: Nextpath Solutions may receive a referral fee if you create a Shopify account through these links.
2. External payment gateways – typical fee components
When Shopify Payments is unavailable or you prefer a local processor, you’ll connect a third‑party gateway (e.g., PayFort, PayPal, Stripe, 2Checkout). The fee breakdown usually includes:
- Processing fee: a percentage per transaction, often 2.9%–3.5% plus a fixed amount (e.g., $0.30).
- Currency conversion fee: many gateways charge 1%–3% when converting to your settlement currency.
- Monthly or annual account fee: some providers require a $10–$30 recurring charge for a merchant account.
- Additional charges: chargeback fees, settlement fees, or optional fraud‑protection add‑ons.
These fees are independent of your Shopify subscription, so you’ll pay both the Shopify plan fee and the gateway’s fees.
3. Calculate the total cost for your market – a realistic example
Assumptions (all figures in US dollars):
- Monthly sales forecast: $10,000.
- Average order value: $50 (200 transactions per month).
- Store is based in Pakistan, but you sell to customers in Saudi Arabia (SAR) and the United States (USD).
- Bank account is in PKR, so any non‑PKR sales require conversion.
Option A – Shopify Payments (if eligible)
- Plan: Basic Shopify ($29/month).
- Transaction fee: 2.9% of $10,000 = $290.
- Conversion fee (2% on the portion sold in SAR, assume 60% of sales): 2% of $6,000 = $120.
- Total monthly cost: $29 + $290 + $120 = $439 (≈4.39% of sales).
Option B – PayPal (external gateway)
- Plan: Basic Shopify ($29/month) – still required.
- PayPal processing fee: 2.9% + $0.30 per transaction → (2.9% of $10,000) + (200 × $0.30) = $290 + $60 = $350.
- Conversion fee (1.5% on SAR sales): 1.5% of $6,000 = $90.
- Monthly PayPal account fee: $0 (PayPal does not charge a monthly fee for standard merchants).
- Total monthly cost: $29 + $350 + $90 = $469 (≈4.69% of sales).
Option C – Local gateway (e.g., PayFort)
- Plan: Shopify Basic ($29/month).
- PayFort fee: 3.0% + $0.25 per transaction → 3% of $10,000 = $300 + (200 × $0.25) = $50 → $350.
- Conversion fee: 1% on SAR sales = $60.
- Monthly gateway fee: $15.
- Total monthly cost: $29 + $350 + $60 + $15 = $454 (≈4.54% of sales).
In this scenario, Shopify Payments is the cheapest option, but only if your country is supported and you can tolerate the 2% conversion charge. If Shopify Payments is unavailable, PayPal ends up slightly more expensive than the local gateway because of the per‑transaction fixed fee.
4. Decision checklist – what to verify before you sign up
- Is Shopify Payments supported in your country? Check the Shopify Payments eligibility page.
- What currencies will you accept? List each target market and note the settlement currency of your bank.
- Gather fee tables from at least two external gateways that operate in those markets.
- Calculate the combined Shopify plan cost + gateway fees using your projected monthly sales volume.
- Identify any fixed monthly or annual fees that could affect cash flow.
- Confirm the required documentation (business registration, tax ID, bank statements) for each gateway.
- Test a small live transaction with your chosen gateway before committing to a full‑scale launch.
Common mistakes and how to fix them
- Ignoring conversion fees: Many sellers only look at the percentage fee and forget the extra 1%–3% conversion charge. Add it to every scenario.
- Assuming the lowest per‑transaction fee is best: A gateway with a lower percentage may have a high fixed fee per order, which hurts low‑ticket sales.
- Overlooking monthly gateway fees: Some “no‑monthly‑fee” providers add hidden settlement fees that appear on your bank statement.
- Choosing a gateway that doesn’t support your bank’s currency: This forces you to open a foreign bank account or incur double conversion.
Practical checklist for pre‑launch payment‑gateway budgeting
- List all target sales currencies.
- Verify Shopify Payments eligibility for your business country.
- Collect fee schedules (percentage, fixed, conversion, monthly) for at least two external gateways.
- Estimate monthly sales volume and average order value.
- Run the cost formulas shown above for each option.
- Add Shopify plan fee to every calculation.
- Identify any additional costs (chargeback fees, fraud tools, settlement fees).
- Select the option with the lowest total cost that meets your compliance and settlement‑currency needs.
- Document the decision and keep the fee tables for future reference.
Conclusion
Understanding the full fee picture – transaction percentages, fixed per‑order costs, currency conversion charges, and recurring gateway fees – lets you pick the most economical payment route before you lock in a Shopify subscription. Use the checklist above, run the simple spreadsheet model, and test a real transaction with your chosen gateway. If the numbers are close or you run into eligibility issues, consider a hybrid approach (Shopify Payments for domestic sales, an external gateway for cross‑border orders) and revisit the calculation quarterly as your sales volume grows.
FAQs
Q: Can I use both Shopify Payments and an external gateway at the same time?
Yes. Shopify lets you enable multiple providers; you can route domestic sales through Shopify Payments and foreign sales through a gateway that offers better conversion rates.
Q: Do I need a separate merchant account for an external gateway?
Most gateways require you to create a merchant account and provide verification documents (business licence, tax ID, bank statements). The account is independent of Shopify.
Q: Will the fees change if I upgrade my Shopify plan?
Transaction percentages drop slightly on higher‑tier plans, but the gateway fees stay the same. Re‑run the cost model whenever you consider a plan upgrade.