How To Reduce Your PayPal Fees On Shopify

By Cesar Beltran
HOW TO REDUCE YOUR PAY created by Shopify web developers

Using PayPal on your Shopify store to receive payments? I recently discovered an easy way to dramatically reduce your fees that Paypal charges you for collecting payments

This information is publicly available, but it’s not in PayPal’s interest to proactively offer this to merchants, so it’s not widely known. Since it took me 4 years (and countless hundreds of dollars in extra fees) to figure this out, in this post I want to share the simple steps that will help you reduce your overall PayPal Fees.

If you’re doing more than $2,500 per month in PayPal Transactions, you can apply for discounted rates.  Here’s how:

  1. Check that you’re doing $2,500 per month or more. If you’re not doing this number, or close to it, you may want to wait until you build up to that amount. (If you’re doing a bit less, e.g. $2,000, it may still be worth applying).  The idea is that they’ll give you a discount if you’re doing large volumes, and hence be paying larger fees on a regular basis.
  2. Log in to your PayPal account.
  3. Visit this link:
  4. Click on the Apply Now button.

From there, your account will be reviewed. Mine was approved within a few hours.

How Much Will You Save?

Let’s use two hypothetical examples to illustrate the potential savings. At face value, they don’t add up to a lot per transaction, but over time, this 5-minute exercise could save you thousands of dollars.  In this example:

  • In Australia, where Shopify Ninjas is based, the ‘normal’ rate is 2.6% + 30c per transaction. Rates may vary depending on your country — to find specifics, you can Google “PayPal Fees in (your country)” and it will usually show your local fees.
  • In our case, the new ‘discounted rate’ is 2.2% + 30c per transaction.

Example One:

  • Let’s suppose we are receiving $3,000 per month via PayPal sales. For example 100 transactions of a $300 product on a Shopify store.
  • Monthly fees with normal rate: $118 (3000 * 2.6% is $78, plus 30c per transaction x 100 transactions is $30).
  • Monthly fees with discounted rate: $96 (3000 x 2.2% is $60, plus 30c per transaction x 100 transactions is $30).
  • Saving: $22 per month, or $264 per year.

Keep in mind, this is for a relatively low volume of 100 transactions per month, or 3 per day, and $3,000 in revenue. As your revenue goes up, so will your fees. As such, you’ll save more with the discounted rate as your business grows.

Example Two:

If you’re running a high-volume, high-revenue store of five times that amount — $15,000 per month revenue at $50 per product, with 300 transactions, that would be:

  • $390 + $90 = $480 per month for the ‘normal’ rate
  • $330+ $90 = $420 per month for the ‘discounted’ rate
  • Saving of $60 per month or $720 per year.

Not A Bad Return For Clicking A Few Buttons.

Here’s the link again:

Not sure when to make the switch from PayPal to a different payment gateway?  Check out this post for a comprehensive analysis and a (free) handy spreadsheet:

Final note: 

We have no vested interest in PayPal whatsoever and don’t make any kickbacks from posting this.  We are all about helping small businesses grow, and watching your outgoing expenses is a critical part of that. This is too good an opportunity not to share since it can potentially save you a significant amount of fees for about 5 minutes’ work.

Thank you again for following our Shopify Insider Blog @ Blackbelt Commerce,  we have many other valuable and informative posts that you will help you to continue to optimize your websites such as  Best Shopify Resources For Boosting Your Stores , how to redce bounce rates on your shopify store, how much does it cost to hire a shopify expert,  and SEO for Your Shopify Store.

Questions?  Happy to answer in the comments.

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Comments 5

  1. This is the second time I’ve tried applying over the past few months, having met (or close to) the $2500 threshold and each time I receive the following error message:

    “Sorry – your last action could not be completed

    If you were making a purchase or sending money, we recommend that you check both your PayPal account and your email for a transaction confirmation after 30 minutes.

    If you came to this page from another website, please return to that site (don’t use your browser’s Back button) and try again.

    If you came from PayPal’s website, click the PayPal logo in the upper-left-hand corner to return to the home page and try again. You might have to log in again.”

    I’ve tried this via Firefox and just now again with Chrome.
    Any idea where to from here?


    1. Hi Richie – not sure about that one, sorry. May be best to chat with PayPal directly. You could try giving them a call (I wouldn’t try their email contact, it’ll take forever, but phone can be quite good). Best of luck!

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