Before their launch, every Shopify merchant also faces the important decision of which payment service providers to integrate. Besides Shopify Payments, PayPal is clearly one of the favorites - especially on the part of customers. Thanks to its simple and user-friendly processing, it's hard to imagine e-commerce without this provider. But in addition to the advantages on the customer side, some merchants are annoyed by the disadvantages of the payment service compared to the cheaper Shopify Payments - are they right?
PayPal in e-commerce
Payment with the world's most popular online system is uncomplicated for every buyer and executed within a few seconds. The aspect of security is at least as important for you as a seller. The PayPal seller protection prevents that a customer can cancel the payment without further action. However, there is always a big disadvantage of PayPal in the focus of the merchants: The fees. Every seller who offers his customers PayPal as a payment method has to pay a share of the invoice amount and a fixed fee. This is a real cost factor, especially for comparatively inexpensive products. The basic fee for the payee is initially 2.49 percent plus 0.35 euros per executed transaction. However, PayPal also offers merchant conditions for sellers: For a monthly transaction volume of between 5,000 and 25,000 euros, there is only a 1.99 percent fee; for over 100,000 euros per month, there is a 1.49 percent fee. However, the transaction fee of 0.35 euros remains. The current overview of PayPal merchant conditions can be found here.
Paypal is one of the most used Shopify payment methods
PayPal is one of the standard payment providers on Shopify and has now established itself as one of the most frequently used services on the platform. With the well-known online payment service, you as a Shopify user get the option to let your customers pay via bank accounts, credit cards or PayPal credit. When you open your own store, Shopify creates a PayPal Express Checkout account for you, which is linked to the email address you used to set up the store beforehand. If you already have a PayPal account, you don't need to do anything else. Otherwise, you should set up such an account for your store so that you can make refunds or enter payments manually in the future. You can also activate so-called guest payments for your customers, so that they can use their credit card if they do not have their own account with PayPal. To do this, however, you must also have a credit card on file in your PayPal account.
Do I need a PayPal business account?
For commercial payments via PayPal, you should always set up a business account first. Otherwise, PayPal may block your private account for a long time, freeze your credit and ask for proof of a business. You don't have to create a new account, you can simply convert your private account into a business account. Once you have a business account, you will need to give Shopify permissions for refunds and manual payment processing via PayPal.
Shopify PayPal integration additionally supports the following features of the online payment service:
- PayPal Express: You get a comprehensive order summary with detailed descriptions for all your sold items, you can take payments immediately and offer your customers a fast payment process via the accelerated check-out.
- Venmo: Your US customers (exclusively!) can make payments in your store instantly on their mobile device via the Venmo app.
PayPal and Shopify - What problems can appear?
Payout: PayPal has its own procedure to finally transfer the money from your customer to you. So if there are any problems with your Shopify payout with PayPal, you need to contact the customer service of your payment provider.The activation of your account can not be completed. In order to activate PayPal as a payment method for your store, the country of your store must be the same as the country of your PayPal account. You can easily adjust the country for your store in the general Shopify settings.
Too many requests via PayPal: Receiving too many requests within a short period of time identifies PayPal as spam. Your account may be temporarily suspended. In this case, you will have to contact PayPal's customer service again and will not be able to get help from Shopify.
As a store owner, Shopify Payments saves you from going through a third-party payment processor. You can manage all your payment processes and offer your customers a smooth payment process in your online store after activation. In addition, transaction fees are eliminated and you still have a wide range of payment methods such as credit cards, ShopPay or even Klarna and purchase on account - even internationally. This is not only interesting for Shopify Plus merchants. Shopify Payments currently supports the following countries with the corresponding currencies: - Australia - Austria - Belgium - Denmark - Germany - Hong Kong - Ireland - Italy - Japan - Netherlands - New Zealand - Singapore - Spain - Sweden - United Kingdom - United States.
PayPal vs. Shopify Payments
PayPal has established itself as the most relevant and popular online payment provider on the web. Using PayPal can greatly increase the trustworthiness of your online store in the eyes of your customers. It is completely free for your customers to use and most buyers are happy to use the provider, which can potentially increase your sales chances. However, in addition to the PayPal fees that apply to every seller, you should also consider the fees for the conversion of a currency on the part of PayPal. This point is especially important for you as a Shopify seller, if your customers come from abroad and pay with corresponding foreign currency in your store. The conversion fees for your business account at PayPal are always three percent above the current basic exchange rate. With Shopify Payments, on the other hand, there are no additional transaction fees for you as a seller. It can also be a big advantage that you can always view your transactions directly from your Shopify dashboard. This way, you have an easy overview of your earnings and don't always have to look at your PayPal, credit card or bank account first. In addition, you save on additional fees and the integration of other interfaces or software, which can potentially always harbor problems. Especially when it comes to performance and display. For example, if you run a multilingual Shopify store, the translation options of third-party apps are often modest. In our opinion, there's really no way around Shopify Payments, as the best terms on the market make it a no-brainer for any merchant to use. Integrating PayPal as an additional payment provider is also mandatory in almost every industry to give your customers the best shopping experience possible. Unfortunately, you have to swallow the bitter pill of fees.