Shopify and PayPal fees: what you really pay

When you use Shopify and PayPal fees together, the total cost per sale is the sum of both platforms. Many merchants look only at the PayPal fee and miss the Shopify transaction fee, app fees, and currency conversion. Understanding the full stack helps you price correctly and protect margin.

Short answer: Shopify charges a monthly plan fee and a transaction fee unless you use Shopify Payments. PayPal charges its own per-transaction fee. Cross-border sales and currency conversion add more. For subscriptions, these fees repeat every cycle, so optimizing the stack matters. Checkivo removes the Shopify platform fee on Checkivo orders and routes renewals through Stripe for lower costs. Related: PayPal Shopify fees and Shopify subscription refund.

The full fee stack

Every Shopify sale through PayPal involves multiple layers of cost:

• Shopify monthly plan fee.

• Shopify transaction fee if you do not use Shopify Payments.

• Payment gateway fee, in this case PayPal's fee.

• Cross-border fee if the customer is in another country.

• Currency conversion fee if the payment currency differs from your account currency.

• App fees, such as subscription apps or email tools.

These fees are not hidden, but they are easy to overlook when calculating profit. A merchant who prices based on gross revenue without considering the full stack will eventually find margin is thinner than expected.

Shopify fees explained

Shopify charges a monthly plan fee based on the plan you choose. Beyond that, Shopify charges a transaction fee on sales if you do not use Shopify Payments. The transaction fee is lower on higher plans.

If you use Shopify Payments, Shopify does not charge the additional transaction fee, but Shopify Payments has its own card processing rate. PayPal is treated as an external gateway, so the Shopify transaction fee still applies if you are not on Shopify Payments.

This means that on a non-Shopify Payments plan, a PayPal sale pays both Shopify's transaction fee and PayPal's fee. That is why the total can be higher than expected.

PayPal fees explained

PayPal charges a percentage plus a fixed fee per transaction. The rate depends on your country and account type. High-volume merchants may qualify for a lower merchant rate.

PayPal's fee is deducted from the transaction total before the money reaches your PayPal account. It is separate from Shopify's fees. PayPal also charges for cross-border payments and currency conversion.

Disputes and chargebacks carry additional fees. If you sell internationally, these can add up quickly.

Currency and cross-border fees

Selling internationally increases the fee stack. PayPal charges a cross-border fee when the customer's account is in a different country. If the currency is different, a conversion fee is also applied.

Shopify's currency conversion depends on your settings. If you use Shopify Markets, customers may see prices in their local currency, but the underlying payout currency may still involve conversion costs.

To reduce these costs, consider accepting local payment methods, opening multi-currency accounts, or using a payment provider with better international rates.

App and subscription fees

Many Shopify stores run subscription apps, email marketing tools, review apps, and upsell apps. These add monthly or per-transaction fees. For subscription stores, the app fee is often a percentage of recurring revenue, which compounds over time.

When evaluating apps, calculate the total cost as a percentage of revenue. An app that charges 1% of subscription revenue can be expensive if your store does significant recurring volume.

A real example

Imagine a $50 subscription order paid through PayPal by a customer in another country. The merchant might pay:

• Shopify transaction fee: roughly 2% of $50.

• PayPal fee: roughly 2.9% plus fixed fee.

• Cross-border fee: roughly 1% to 2%.

• Currency conversion: roughly 3%.

Total fees could approach 10% of the order. Over a year of renewals, that is a significant cost. For subscription businesses, optimizing payment processing is a core financial discipline.

How to reduce total fees

Here are practical ways to lower the combined Shopify and PayPal fee stack:

• Use Shopify Payments if available to avoid the Shopify transaction fee.

• Negotiate a lower PayPal merchant rate for high volume.

• Price in local currencies to reduce conversion fees.

• Limit cross-border sales to markets where you have good local payment options.

• Audit apps and remove those with high revenue-based fees.

• Route subscription renewals through a lower-cost provider like Stripe.

Impact on subscriptions

Subscriptions make fee optimization even more important. A one-time sale pays fees once. A subscription pays fees every cycle. A 1% fee difference on a $50 monthly subscription is $6 per year per customer. At scale, that is thousands of dollars.

Checkivo helps by removing the Shopify platform fee on Checkivo orders and using Stripe for subscription renewals. This lowers the total cost stack while keeping the customer experience smooth.

Common fee-stack mistakes

Merchants often price products based on gross margin without considering the full fee stack. Shopify plan fees, transaction fees, PayPal fees, and app fees all reduce the final margin. A product that looks profitable on a spreadsheet can be marginal in reality.

Another mistake is assuming all payment methods cost the same. PayPal and Shopify Payments have different fee structures. Customers in different countries may trigger different cross-border and conversion fees.

Some merchants also ignore subscription app fees. A 1% app fee on recurring revenue sounds small, but over a year it is a meaningful cost that should be included in subscription pricing.

Implementation checklist

Optimize your fee stack with this checklist:

• List every fixed and variable cost per order.

• Calculate the effective cost for domestic and international orders.

• Compare Shopify Payments, PayPal, and Stripe for your volume.

• Audit apps for revenue-based fees.

• Price in local currencies where possible.

• Model the impact on subscriptions over a year.

Key takeaways

Shopify and PayPal fees stack quickly. The headline rate is only part of the picture. For subscription businesses, the total fee stack determines long-term profitability. Checkivo reduces Shopify platform fees and optimizes renewals through Stripe.

Fee comparison examples

Consider a domestic $50 order on Shopify Basic using PayPal. The merchant might pay roughly 2% to Shopify and 2.9% plus a fixed fee to PayPal. The total payment cost is around 5% plus the fixed fee. If the same order used Shopify Payments, the Shopify transaction fee would be removed, and the card rate might be lower.

Now consider a $50 order from an international customer paying in a different currency. The cost rises by cross-border fees and currency conversion. The total could approach 8% to 10%. For a subscription, that same 10% applies every month.

These examples show why international subscription businesses should carefully compare payment providers. A small rate difference becomes a large cost at scale.

Advanced fee optimization

High-volume merchants can negotiate with PayPal and Stripe directly. Rates are not always fixed. If you process significant volume, ask for a custom rate based on your transaction profile.

Another tactic is to route transactions by region. Use local payment methods in Europe, Asia, and other key markets. Local methods often have lower fees than international PayPal transactions and better conversion.

Frequently asked questions

Do Shopify and PayPal fees stack?
Yes. Shopify may charge a transaction fee, and PayPal charges its own payment processing fee. Cross-border and currency conversion add more.

How do I calculate total fees per sale?
Add the Shopify transaction fee, PayPal fee, cross-border fee, and currency conversion fee to the order value.

Can I avoid Shopify transaction fees?
Yes, by using Shopify Payments where available. PayPal still carries its own fee.

Why are my fees higher than expected?
International sales, currency conversion, and app fees are common reasons fees exceed the headline rate.

Does Shopify Payments have lower fees than PayPal?
Usually yes, but it depends on your region and volume. Compare total costs for your specific setup.

How do subscription fees add up over time?
Every renewal pays processing fees. Over a year, small percentage differences become significant.

Can I reduce currency conversion fees?
Yes, by pricing in local currencies, using multi-currency accounts, or choosing a provider with better conversion rates.

Are app fees included in Shopify fees?
No. App fees are separate and are often monthly or based on usage and revenue.

How does Checkivo reduce subscription fees?
Checkivo removes Shopify platform fees and routes renewals through Stripe, which often has lower fees than PayPal.

Should I stop using PayPal to save fees?
Not necessarily. PayPal can increase conversion. Measure whether the extra sales outweigh the higher fees.

Can I use both Shopify Payments and PayPal?
Yes. Many merchants offer both to maximize conversion and customer choice.

Do fees apply to refunds?
PayPal generally keeps the transaction fee. Shopify's refund policies depend on your plan and payment provider.

Is Stripe cheaper than PayPal for subscriptions?
Usually yes, especially for recurring billing. Stripe's subscription tooling is also stronger.

How do I compare payment providers?
Calculate total cost per transaction for your average order value, region mix, and volume.