How to Select a Payment Gateway for My Online Store
Choosing a payment gateway looks like a pricing comparison. It mostly isn’t. The headline rate — that “2.9% + 30¢” everyone quotes — is roughly the same across the big providers, and it is rarely what decides the bill at the end of the month.
What decides it is the structure: which platform you sell on, where your customers’ cards are issued, what currency you price in, and how often you get disputes. This guide covers those, because they are what actually moves the number.
Start here if you sell on Shopify
This one catches a lot of merchants, so it goes first. If you use a payment provider other than Shopify Payments, Shopify adds its own transaction fee on top of whatever your processor charges. The surcharge depends on your plan:
| Plan | Third-party provider fee |
|---|---|
| Basic | 2.0% |
| Grow | 1.0% |
| Advanced | 0.6% |
| Plus | 0.2% |
On a Basic plan, routing card payments through an external gateway at roughly 2.9% means you are effectively paying close to 4.9% — a two-percentage-point penalty for the privilege. On $10,000 of monthly sales that is $200 a month, for no benefit most stores can name.
There are legitimate reasons to take that hit: Shopify Payments is not available in every country, some business categories are not supported, and if you sell across several platforms you may want one processor behind all of them. But it should be a decision, not something you discover in a statement. Check your plan’s rate on Shopify’s pricing page before you switch anything.
Other hosted platforms do the same thing to varying degrees. If you are on BigCommerce, Wix or Squarespace, look for the equivalent clause before comparing processor rates.
Gateway, merchant account, PSP
Three terms get used interchangeably and they are not the same thing.
- A payment gateway authorises the transaction — it passes the card details securely and returns an approve or decline.
- A merchant account is where the money sits between authorisation and your bank account.
- A payment service provider (PSP) bundles both, so you sign up once and start taking payments.
Stripe, PayPal, Square, Adyen and Shopify Payments are PSPs. Authorize.net is a gateway you pair with a separate merchant account. For most small and mid-sized stores the PSP model is the right default: one signup, one dashboard, no underwriting process to sit through before your first sale.
The trade-off appears at volume. PSPs put you into pooled pricing, which is simple but not cheap once you are processing serious money. A dedicated merchant account with interchange-plus pricing usually beats it — more on that next.
The three pricing models
Flat rate. One published percentage plus a fixed amount per transaction, the same for every card. Stripe, Square and PayPal work this way. Predictable, no negotiation, and you pay the same for a cheap debit card as for a premium rewards card that genuinely costs the processor more.
Interchange-plus. You pay the actual card-network interchange fee, plus a fixed markup. Adyen and most traditional acquirers price this way. Statements are harder to read, but you see the real cost and you stop subsidising other merchants’ expensive cards. Generally worth moving to somewhere in the low-to-mid six figures of annual processing — run the numbers rather than guessing.
Gateway plus merchant account. Separate contracts, separate monthly fees, per-transaction gateway charges. Most flexible, most administration. Usually only worth it if you have a specific reason — an existing acquirer relationship, or a high-risk category the PSPs decline.
The fees that aren’t in the headline rate
This is where the real difference between providers shows up.
- International cards. Typically around an extra percentage point when the card was issued outside your country. If you sell globally this is not a rounding error.
- Currency conversion. Often another 1–2% on top when you charge in a currency other than your settlement currency.
- Disputes. A per-chargeback fee on top of the lost sale. Whether it is refunded when you win varies by provider and is worth checking — Stripe returns its dispute fee if you win; some others never do.
- Refunds. Ask whether the original fixed fee comes back on a refund. Frequently it doesn’t, which quietly matters if you run a generous returns policy.
- Payout timing. Two days versus seven is a cash-flow question, not a fee, but it can matter more than a few basis points.
A store selling domestically in one currency and a store selling worldwide in five will get very different bills from identically-priced providers.
What else to check before you commit
Wallets and express checkout. Apple Pay, Google Pay, PayPal and Shop Pay remove most of the typing from a mobile checkout, and mobile is where carts get abandoned. Whichever provider you pick should support the wallets your customers already use.
Buy-now-pay-later. Klarna, Afterpay and Affirm cost more per transaction than a card and can lift conversion and average order value enough to justify it. Test it rather than assuming either way.
Strong Customer Authentication. If you sell into the UK or EU, your checkout must handle 3-D Secure properly. A gateway that implements it badly costs you completed sales at the last step.
PCI scope. Hosted fields and redirect checkouts keep card data off your servers and keep your compliance burden small. Taking raw card details on your own site moves you into a much heavier obligation. Almost nobody should choose that deliberately.
Your category. PSPs maintain prohibited and restricted business lists, and they enforce them after you have started trading. If you sell anything near a grey area, confirm you are acceptable before you build around a provider.
Don’t trust any published fee table — including this one
Rates change, they differ by country, and comparison articles go stale fast. The percentages in the Shopify table above come from Shopify’s own pricing page, but everything else here is deliberately described as a structure rather than a number, because numbers are what makes a guide like this wrong two years later.
Before deciding, pull current rates from the source for your own country: Stripe, PayPal, Square, Shopify. Then model them against your actual last three months of orders — domestic versus international split, average order value, refund rate — rather than against a hypothetical $100 sale.
A short way to decide
- On Shopify, under moderate volume? Use Shopify Payments unless you have a specific reason not to. The third-party surcharge usually outweighs any rate you can find elsewhere.
- On another hosted platform? Check for an equivalent surcharge first, then pick the PSP with the best terms for your international and currency mix.
- Processing at real scale? Get interchange-plus quotes. The savings become worth the added complexity.
- Selling wholesale as well as retail? Your buyers may want to pay on invoice or by bank transfer rather than card at checkout — worth confirming your provider handles that, or planning to take those orders separately.
On that last point: if you take wholesale orders outside your normal checkout, the paperwork matters more than the gateway. Our free wholesale order form template and wholesale contract template cover payment terms alongside the order itself.
Last word
For most stores this is a shorter decision than it looks. Use your platform’s native processor unless something specific rules it out, watch the international and currency surcharges if you sell abroad, and revisit the arrangement when your volume changes materially. The differences between the major providers on a single domestic sale are small. The differences in what surrounds that sale are not.
Structural guidance accurate as of August 2026; specific rates change frequently and vary by country — always confirm current pricing with the provider before committing.