When should I move away from PayPal to another payment gateway on my Shopify store? I’m tired if paying such high fees to PayPal.
We hear you. I get asked this question a lot, and it can be hard to say exactly when it’s worthwhile to open up other payment gateways for your shopify customers. This post will tell you when and why. I’ll be honest – it can be a complex topic, with some calculations required to figure out whether it’s worth it for you or not. Ready?
Why consider moving away from PayPal?
First up, let’s consider the advantages of PayPal:
- Relatively easy to set up
- Free accounts – no monthly fees
- Very easy to integrate with Shopify
- Widely accepted – can be used by customers in most countries
Now, the downsides:
- You pay the same in fees, regardless of how many transactions you do. (In some regions, the fees go down when you do more transactions, see here for an example).
- This means that, as you grow, PayPal becomes more expensive.
Example: PayPal Versus eWay (interchange with yours as needed)
Example: Typical PayPal rates are 2.4% + 30c per transaction.
If you make a sale of $100, PayPal will keep $2.70 and give you the rest. When you’re first starting out, this is fine.
However, if you do 100 times that amount: you make sales of $10,000, Paypal keeps $270. This can start to add up.
With other gateways like EWay in Australia and others around the world, the more transactions you do, the less you pay per transaction. More transactions, lower percentage.
A Free Tool You Can Use Right Now: Is it worth it for YOU to switch?
Using the spreadsheet below – which is available as a free download at the bottom of this post – is an example comparison. You will need to fill in some numbers of your own, based on your payment gateway, bank, and own setup.
For a store doing $30,000 per month, it no longer makes sense to use PayPal; it’s better to pay an annual fee and pay less per transaction.
Using the assumptions in the example spreadsheet (below): With PayPal, fees would be $810.00. If you applied for the discount and were accepted, it could be less. With eWay based on a 2% bank rate, $757.00.
Want to compare your favorite gateway with PayPal?
- Check out the available Shopify compatible gateways in your country here.
- Go to their pricing page.
- Plug their pricing – and your country’s PayPal pricing – into the spreadsheet below. It will tell you whether it’s worthwhile or not.
Think this sounds convoluted or boring? I wouldn’t blame you – but spending a few minutes could save you thousands of dollars this year. Isn’t it worth it?
Thank you for showing interest in our Shopify Insider Blog @ Blackbelt Commerce. Please make sure to check out our products. We also have some top blog recommendations for you to check out; Vendor Page In Shopify and Sell More On Your Shopify Store. Keep a lookout for new blog posts.
Do you have any questions? We’ll be happy to answer them in the comments.
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