Best Shopify Gateway Options of 2024

Key Highlights

• Shopify supports various payment gateways, including built-in Shopify Payments, PayPal Express Checkout, Authorize.Net, and NMI.
• PayPal and Shopify Payments are PayFacs that offer flat-rate pricing, which might be convenient but can often result in higher processing fees for merchants.
• Third-party gateways such as Authorize.Net and NMI offer interchange-plus pricing, providing more control and potentially lower processing fees, especially for businesses with higher transaction volumes.
• Even when using a third-party gateway, Shopify adds an additional transaction fee for each sale, which decreases as you upgrade to higher Shopify plans.
• Despite Shopify’s extra transaction fee, interchange-plus pricing from third-party gateways like Authorize.Net or NMI may still offer cost savings over Shopify Payments.

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Payment Gateway in Shopify Options

Shopify Payments (Powered by Stripe)

Shopify Payments is the default payment solution for Shopify stores, powered by Stripe, a PayFac. This means merchants don’t have their own merchant accounts and can face risks of account freezes or shutdowns.

Key Features:

• Flat-rate pricing: 2.9% + 30¢ for Basic Plan; 2.6% + 30¢ for Shopify Plan; 2.4% + 30¢ for Advanced Plan.
• Additional Shopify transaction fees on third-party gateways: 2.0% for the Basic Plan, 1.0% for the Shopify Plan, and 0.6% for the Advanced Plan.
• Supports multiple payment methods, including credit cards, debit cards, and digital wallets like Apple Pay.

PayPal Express Checkout

PayPal operates similarly to Shopify Payments as a PayFac with flat-rate pricing, making it convenient but potentially more expensive for businesses with higher transaction volumes.

Key Features:

• Flat-rate pricing: 3.49% + 49¢ per transaction, with additional fees for international payments.
• Card payments processed quickly, without re-entering payment information.
• Well-recognized and trusted by millions of users, boosting consumer trust.

Authorize.Net

Authorize.Net is a versatile payment gateway that offers interchange-plus pricing, making it a cost-effective solution for businesses, particularly those with higher volumes or mid-risk and high-risk businesses.

Key Features:

• Multiple payment methods: Credit/debit cards, electronic checks, and digital wallets.
• Interchange-plus pricing, allowing merchants to pay a more accurate rate based on the true cost of transactions, often lower than flat-rate pricing.
• Advanced fraud detection and customizable payment forms to secure and streamline online payments.

NMI (Network Merchants Inc.)

NMI provides a highly customizable payment gateway solution, suitable for businesses that need more control over their payments, especially high-risk businesses.

Key Features:

• Supports multiple payment options, including subscription billing and recurring payments.
• Interchange-plus pricing for lower and more accurate processing fees.
• Advanced fraud detection tools and comprehensive reporting to ensure secure and efficient payment processing.

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Why Use Authorize.Net or NMI?

Using third-party gateways like Authorize.Net or NMI provides more flexibility, better control, and interchange-plus pricing that can significantly reduce processing fees compared to Shopify Payments and PayPal, which rely on flat-rate pricing.

Even though Shopify charges an additional transaction fee for using third-party gateways (ranging from 2.0% on the Basic Plan to 0.6% on the Advanced Plan), businesses may still save money in the long run by using interchange-plus pricing. This model offers lower fees based on the actual cost of each transaction, which is particularly beneficial for high-volume businesses.

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Comparing Shopify Payments vs Third-Party Gateways

Transaction Fees:

• Shopify Payments (powered by Stripe) charges flat-rate pricing. Additional Shopify transaction fees of 2.0%, 1.0%, and 0.5% apply when using third-party gateways.
• Authorize.Net/NMI: With interchange-plus pricing, merchants pay more accurate fees based on the true cost of the transaction, which can save money even when factoring in Shopify’s transaction fees.

Security & Control:

• Shopify Payments: Basic fraud detection but limited control as it’s a PayFac.
• Authorize.Net/NMI: Strong fraud prevention, more control over payment data, and fewer risks of account freezes.

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Is Interchange-Plus Better?

While Shopify Payments and PayPal offer convenient flat-rate pricing, it may not be the most cost-effective for all businesses. With interchange-plus pricing offered by Authorize.Net and NMI, businesses pay the actual cost of processing transactions, which can be cheaper for higher volumes of card payments. This pricing structure, combined with advanced features like fraud detection and multiple payment options, makes third-party gateways a more reliable and cost-effective choice for many merchants.

Even with Shopify’s additional transaction fees for using third-party gateways, businesses may still save by avoiding the hidden costs of flat-rate pricing.

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Comparing Shopify Payments vs Third-Party Gateways

Transaction Fees:

• Shopify Payments: With flat-rate pricing (e.g., 2.9% + 30¢ per transaction), Shopify Payments provides simplicity, but it may not always be the most cost-effective, especially for businesses processing larger transaction volumes.
• Authorize.Net/NMI: Offer interchange-plus pricing, which is often cheaper for businesses handling more transactions. Interchange-plus adjusts based on the card type and transaction risk, providing more transparent and potentially lower fees.

Security:

• Shopify Payments: Offers basic fraud detection tools, but lacks the advanced fraud prevention features found in more robust gateways.
• Authorize.Net: Known for advanced fraud detection, customizable security settings, and protection against unauthorized payments.
• NMI: Also provides strong fraud prevention tools, with added flexibility for securing payment information.

Customizability:

• Shopify Payments: Offers less flexibility as a built-in solution, focusing more on ease of use rather than customization.
• Authorize.Net/NMI: Offer a wide range of customization options, including support for dynamic pricing, subscription management, and tailored checkout experiences for a more personalized payment setup.

Suitability for High-Risk or Mid-Risk Businesses:

• Shopify Payments: As a PayFac (Payment Facilitator) service, Shopify Payments can be more restrictive for high-risk businesses, with a higher likelihood of account freezes or shutdowns.
• Authorize.Net/NMI: Are better suited for high-risk industries, offering more stability and reduced risks of account freezes. These gateways are ideal for businesses needing a more dependable payment solution for long-term processing.

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Conclusion: Picking the Best Payment Gateway for Your Shopify Store

Choosing the best payment gateway for your Shopify store depends on your specific business needs. For low-risk businesses, Shopify Payments offers convenience with a built-in setup. However, businesses in high-risk or mid-risk industries or those processing large transaction volumes might benefit more from third-party gateways like Authorize.Net or NMI. These gateways offer interchange-plus pricing, greater customization, and advanced security features, helping you reduce costs while maintaining control over your payments.

Even with Shopify’s added transaction fees for third-party gateways (ranging from 2.0% down to 0.6% based on your plan), you may still save money over Shopify’s flat-rate model by choosing a gateway that adjusts fees based on actual transaction costs. Upgrading to a higher Shopify plan also reduces these additional fees.

Ultimately, understanding the features of each gateway, whether convenience, customization, or security, will help you make an informed decision for your business.

Frequently Asked Questions

What are the best Shopify payment gateways for 2024?

The best payment gateways for Shopify in 2024 include options like Shopify Payments, PayPal, Authorize.Net, and NMI. Each payment provider offers different features to accommodate various business needs. Shopify Payments offers easy integration with no extra monthly fee, but Authorize.Net and NMI provide more customizable features, including interchange-plus pricing, making them better options for businesses that process larger volumes or are in high-risk categories.

How do I choose a payment gateway for my Shopify store?

Choosing a payment gateway for your Shopify store involves evaluating transaction fees, security, and the ability to accept payments globally. Shopify Payments offers seamless integration and simple flat-rate pricing but is powered by Stripe. For businesses seeking more control, Authorize.Net and NMI provide better customization, advanced fraud detection, and interchange-plus pricing, which can result in lower costs compared to flat-rate payment processors like Stripe or PayPal.

What fees are associated with using Shopify payment gateways?

Most payment processors have a combination of monthly fees and transaction costs. Shopify Payments does not charge a monthly fee, but it has a flat-rate pricing model. For example, Shopify Payments charges 2.9% + 30¢ per transaction. Using Authorize.Net or NMI might offer better savings through interchange-plus pricing, though Shopify still charges an extra transaction fee for third-party gateways, which reduces as you upgrade Shopify plans.

Can I use multiple payment gateways on my Shopify store?

Yes, Shopify allows you to use multiple payment gateways at once, such as Authorize.Net, PayPal, or Shopify Payments. This allows you to accept payments through various payment methods, giving your customers more options at checkout. By managing these gateways in the Shopify dashboard, you can ensure your store offers a smooth paymentexperience for a wide range of customer preferences.

What are the benefits of using Shopify Payments?

The main advantage of using Shopify Payments is the seamless integration within the Shopify platform. There is no additional monthly fee, and it allows you to manage your payments from customers directly through the Shopify dashboard. However, since Shopify Payments is powered by Stripe, it operates under a PayFac model, which can lead to account freezes, making Authorize.Net and NMI more reliable options for businesses that want a dedicated merchant account and lower processing fees with interchange-plus pricing.

Why should I consider Authorize.Net or NMI over Shopify Payments or PayPal?

While Shopify Payments and PayPal are convenient with flat-rate pricing, Authorize.Net and NMI offer more cost-effective options for larger-volume merchants through interchange-plus pricing. These payment gateways also offer stronger fraud detection tools and support for high-risk businesses, which Shopify Payments and PayPal may not handle as well due to their PayFac models. Additionally, Authorize.Net and NMI provide more control over your payment processing, allowing for better customization and security measures.