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Activate PayPal for Shopify as a payment method
Reading time: 5 minutes
Integrating PayPal into your Shopify store can make the checkout process easier for your customers and significantly increase your conversion rate. That's why I'll explain everything in this article, Add & integrate Shopify PayPal as a payment method in 2025
Integrating PayPal into your Shopify store can make the checkout process easier for your customers and significantly increase your conversion rate. That's why I'll explain everything you need to know about PayPal in Shopify in this article. Here you'll learn how to integrate PayPal into Shopify, what possible disadvantages it can have for you, how PayPal compares to Shopify Payments and finally my recommendation on payment gateways.
What is PayPal?
PayPal is a leading global online payment service that enables users to make payments securely and quickly over the Internet. With over 400 million active users, PayPal provides a trusted platform for transactions between buyers and sellers.
How you can integrate PayPal into Shopify
Integrating PayPal into your Shopify store is straightforward:
- Open Shopify admin: Log in to your Shopify admin area.
- Call up the settings: Click on "Settings" and then on "Payments".
- Select PayPal: In the "PayPal" section, select "PayPal Express Checkout".
- Activate: Click on "Activate" and log in with your PayPal business account.
- Grant authorizations: Follow the instructions to grant Shopify the required permissions.
After completing these steps, PayPal is activated in your Shopify store and can be used by customers as a payment method.
PayPal is one of the most commonly used payment methods
PayPal enjoys great popularity in online shopping. Buyer protection is an important argument for this success. Due to its widespread use, Shopify merchants are encouraged to offer PayPal as a payment method. This is because customers often abandon a purchase if they cannot find their preferred payment method in the checkout. However, the payment service provider unfortunately has some disadvantages for merchants.
Disadvantages of PayPal for Shopify merchants
Using PayPal as a payment method in your Shopify store offers numerous advantages, but there are also some potential disadvantages to consider:
Transaction fees: In Germany, PayPal charges a fee of 2.49% of the transaction amount plus a fixed fee of €0.35 per transaction for receiving payments for goods and services. For example, an amount of €100 would incur a total of €2.84 in fees. These can sometimes drastically reduce a merchant's profit margin, especially at low prices.
Payout time: The transfer of PayPal funds to your bank account can take several days. This delay can affect the liquidity of your business, especially when fast cash inflows are required.
Customer experience: When using PayPal, customers are often redirected to their website to complete the payment process. This additional step can lengthen the checkout process and potentially lead to abandoned purchases.
Payout problems: PayPal uses its own procedure for transmitting customer payments to merchants. If you have problems with payouts, you must contact PayPal customer service directly, as Shopify cannot provide support in such cases.
Account activation and country settings: To activate PayPal as a payment method in your Shopify store, the country settings of your store must match those of your PayPal account. Different country settings can prevent activation. Make sure that the country settings are configured correctly in the general Shopify settings.
Account restrictions for high transaction volume: A sudden or unusually high transaction volume can be classified as suspicious, which can lead to temporary restrictions or even suspension of your account. In such cases, it is necessary to contact PayPal customer service, as Shopify cannot assist with this.
Shopify Payments as a PayPal replacement for Shopify?
Shopify Payments is Shopify's in-house payment gateway and offers a number of advantages for store operators. But can it be a real alternative to Shopify? Here is a comparison of the two options.
1. integration and user-friendliness
- Shopify Payments: As Shopify's in-house solution, Shopify Payments is seamlessly integrated into the platform. Activation is done directly from the Shopify dashboard, without the need for third-party accounts. Customers can stay on your website throughout the checkout process, resulting in a more consistent user experience.
- PayPal: Although it is a widely used and trusted payment gateway, customers are redirected to the PayPal website during the checkout process to complete the payment. This can lengthen the checkout process and potentially lead to abandoned purchases.
2. fee structure
- Shopify Payments: Transaction fees vary depending on your Shopify plan. For example, the cost for online credit card payments ranges from 2.4% to 2.9% plus $0.30 per transaction. There are no additional fees for use.
- PayPal: For domestic transactions in the USA, a fee of 2.9% of the transaction amount plus USD 0.30 per transaction is charged. Additional fees may apply internationally.
3. payout period
- Shopify Payments: Payouts are usually made directly to your bank account within 3 working days, depending on your location.
- PayPal: The transfer of PayPal funds to your bank account can take between 5 and 7 working days.
4. security and fraud protection
- Shopify Payments: Offers integrated fraud detection tools and complies with PCI-DSS standards, ensuring a high level of security.
- PayPal: Has robust security measures and offers both buyer protection and seller protection programs. However, in the event of disputes, the decision-making processes can take longer, which can lead to uncertainty.
5. availability and acceptance
- Shopify Payments: Is available in many countries, but not worldwide. It supports common payment methods such as credit and debit cards as well as local payment options in certain regions.
- PayPal: Recognized worldwide and available in over 200 countries. Many customers trust the company, which can increase the conversion rate.
My recommendation: Include all common payment methods
The data on payment methods in e-commerce is clear. Every customer has their own preference and will expect this in your Shopify store. Therefore, my recommendation is to offer as many methods as possible. Shopify Payments already covers a large part of this. Paypal must be integrated into Shopify independently of this.
Conclusion - Paypal is mandatory for Shopify
As PayPal is one of the most used payment gateways worldwide, I recommend every e-commerce merchant to offer this option in their store. Although there may be occasional issues that require additional administration, the potential gain from an increased conversion rate outweighs this. Studies show that integration can increase conversion rates by up to 28%. This positive result can justify the challenges associated with using PayPal.
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Frequently asked questions about Shopify PayPal
Can I use PayPal on Shopify?
Yes, you can use PayPal on Shopify. Shopify offers a direct integration to PayPal, so your customers can easily pay with their PayPal account in the checkout.
Why doesn't PayPal work with Shopify?
If PayPal does not work with Shopify, this is usually due to missing or incorrect settings. You often need to connect your PayPal Business account to Shopify or enter your API data. Without this link, PayPal cannot be used in the Shopify checkout.
What payment methods are available with Shopify?
Shopify offers various payment methods: Shopify Payments (credit card, Klarna, Sofortüberweisung), Shop Pay, PayPal, Apple Pay, Google Pay and external providers such as Stripe. This allows you to offer your customers a wide range of options.
How much does PayPal charge for €100?
For an amount of €100 via PayPal, 2.49% + €0.35 is generally charged in Germany. This means that after deducting the PayPal fees, you will have around €97.16 left over from €100.
What are the fees for PayPal Business?
The standard fees for PayPal Business in Germany are currently 2.49% + €0.35 per transaction. The fees may vary depending on the sales volume and individual contract.
How high is the fee for PayPal payments?
The fee for a PayPal payment in Germany is 2.49% of the payment amount + €0.35 per transaction. Higher fees may apply for international payments.
Does Shopify charge a fee for using PayPal?
Yes, Shopify charges an additional transaction fee if you use PayPal instead of Shopify Payments. This is between 0.5% and 2% per transaction, depending on your Shopify plan. If you have activated Shopify Payments, these additional fees do not apply.
How do I add PayPal to my Shopify store?
To add PayPal to your Shopify store, go to your store's settings and select the "Payment providers" section. There you can select PayPal as a payment option and enter the required information to link your PayPal account.
How can I ensure that my customers can accept PayPal?
To ensure that your customers can accept PayPal as a payment method, you need to set up the PayPal integration in your Shopify store correctly. Check that the PayPal option is enabled and test the checkout process to make sure everything is working properly.
Can I make refunds manually via PayPal?
Yes, you can make refunds manually via your PayPal business account. To do this, go to the transaction you want to refund in your PayPal account and follow the refund instructions. Don't forget to note the refund in your Shopify store as well.
How do the conversion fees work with PayPal?
PayPal conversion fees may apply if you receive payments in a foreign currency. These fees depend on the currency in which the transaction is made and may be an additional cost that you should consider when making international sales.
