Shopify Payments vs Third-Party Acquirers: When Should You Make the Switch?

Payment processing costs are one of those critical business expenses that often slip under the radar - until they don't. At United Apps, we work with Shopify merchants daily, building apps and themes that help power their online stores. Time and again, we're asked the same question: "Am I paying too much for payment processing?"

The answer isn't always straightforward, particularly when it comes to deciding between Shopify Payments and third-party card acquirers. That's why we've partnered with Stable Payments - specialists in card acquiring, multi-currency collection, and FX hedging for ecommerce businesses - to break down exactly when it makes financial sense to switch, the hidden costs to watch for, and the often-overlooked foreign exchange considerations that can dwarf your processing fees.

Whether you're a bootstrapped start-up on the Basic plan or a high-volume retailer on Advanced, this guide will help you calculate your true payment costs and make an informed decision based on hard numbers, not guesswork.

The Silent Profit Killer: Why Payment Costs Hide in Plain Sight

Most growing retailers don't calculate their true payment costs simply because nothing feels broken in the early stages. As long as orders arrive and settlements hit the bank, payment fees blend into the background, quietly eroding margins as they grow. In our experience, 'finance wastage' manifests as small, easily ignored leakages: duplicated fees, unoptimised FX rates, rate tiers never renegotiated as volumes climbed. These only become visible when turnover ramps up and the absolute cost suddenly becomes eye-watering.

Regular benchmarking of providers and finance systems is crucial. Yet one area where merchants encounter the most complexity is processing customer payments online, particularly when powered by Shopify.

Shopify's intuitive setup, scalable infrastructure, and comprehensive feature-set make it the go-to platform for everyone from start-ups to multinational brands. Shopify also offers its own payment gateway, Shopify Payments, alongside the option to 'bring your own' card acquirer - for a premium. That additional cost on top of your chosen acquirer's transaction fees can make alternatives seem unattractive. But understanding when switching to a third-party acquirer delivers more control, flexibility, and crucially, cost savings, is essential for businesses serious about profitability.

Real Savings, Real Numbers: The £20,000 Wake-Up Call

A recent example: a homeware retailer processing over £300,000 monthly through their Shopify site on the Advanced tier using Shopify Payments. By benchmarking alternative acquirer offers, we identified potential savings of 0.6% of total transaction volume - over £20,000 annually - without re-platforming their ecommerce site or disrupting operations. But at what point does switching become viable? Where's the tipping point? Let's break it down.

The Price List They Don't Make Easy: How Shopify Payments Actually Works

For UK merchants, Shopify's three main plans (excluding Enterprise 'Plus') with Shopify Payments enabled look like this:

The key point: if you switch to a third-party provider (Worldpay, Adyen, Stripe, Square, etc.), Shopify charges you an additional fee on top of your acquirer's costs. This raises the bar for when switching becomes worthwhile.

What Third-Party Acquirers Actually Charge (And Why It Varies)

UK card processing fees vary by provider, card mix, and volume. For small to mid-sized merchants, online card processing typically costs 1.4%–2.5% + 20–25p per transaction for 'all-in' flat-rate deals (think Stripe, Square). Traditional acquirers offer bespoke pricing, delivering blended rates closer to 1.1%–1.6%, particularly when your card mix is primarily UK consumer cards.

For merchants keen to improve their card processing costs, understanding your specific card mix and negotiating leverage is crucial.

Here's the challenge: if you're using Shopify Basic with another acquirer charging 1.3% + 10p, your total effective fee becomes 1.3% (acquirer) + 2.0% (Shopify premium) + 10p = over 3.3% - far more expensive than Shopify Payments at 2.0% + 25p. Let's examine three realistic scenarios.

Scenario One: The Start-Up on Basic (Stick with Shopify Payments)

An early-stage store on Basic processing £20,000 monthly across 400 orders:

Shopify Payments: (2.0% × £20,000) + (400 × £0.25) = £500/month | Effective rate: 2.5%

Third-party acquirer (1.3% + 10p): (1.3% × £20,000) + (2.0% × £20,000) + (400 × £0.10) = £700/month | Effective rate: 3.5%

Verdict: Stick with Shopify Payments. You'd pay £200 extra monthly (£2,400 annually) by switching.

Scenario Two: The Growing Store on Grow (Borderline Territory)

An online store processing £50,000 monthly across 1,000 orders on the Grow plan:

Shopify Payments: (1.7% × £50,000) + (1,000 × £0.25) = £1,100/month | Effective rate: 2.2%

Third-party acquirer (1.2% + 10p): (1.2% × £50,000) + (1.0% × £50,000) + (1,000 × £0.10) = £1,200/month | Effective rate: 2.4%

Verdict: Shopify Payments remains cheaper, but margins are tight. Your ability to negotiate better third-party pricing could tip the balance.

Scenario Three: The High-Volume Store on Advanced (Switch and Save)

A high-turnover store processing £250,000 monthly across 5,000 orders, having negotiated better terms (0.8% + 2p):

Shopify Payments: (1.5% × £250,000) + (5,000 × £0.25) = £5,000/month | Effective rate: 2.0%

Third-party acquirer (0.8% + 2p) + Shopify premium (0.6%): (0.8% × £250,000) + (0.6% × £250,000) + (5,000 × £0.02) = £3,600/month | Effective rate: 1.44%

Verdict: Switch. You'll save £1,400 monthly (£16,800 annually), provided secondary fees like PCI compliance aren't prohibitive. For guidance on making the transition, merchants can review how to switch card acquiring providers smoothly.

The Convenience Premium: Why Some Merchants Pay More (And Sleep Better)

Beyond raw numbers, convenience matters - especially for businesses without dedicated finance teams. Shopify Payments consolidates everything: payouts, disputes, fees, and reporting live in your Shopify backend, eliminating additional integrations. Because you're not paying the third-party transaction fee, statements reconcile more easily. Built-in support for Shop Pay, Apple Pay, and Google Pay requires zero extra configuration.

Sticking with Shopify Payments avoids:

• Two sets of reports - one from Shopify, one from your acquirer
• Potential mismatches between authorisations, captures, and payouts requiring reconciliation
• Extra contracts, onboarding, periodic re-underwriting, and possible PCI compliance requirements

If you lack a seasoned finance team and savings aren't significant, convenience outweighs cost. However, there's another dimension that can eclipse transaction fees entirely: foreign exchange.

The Hidden Margin Killer: FX Costs That Rival Your Card Fees

If you serve a significant international customer base and sell cross-border from your own website, FX costs can rival - or exceed - differences in card fees. Shopify Payments charges an additional 2% currency conversion fee on international transactions for non-US stores, on top of usual card transaction fees.

Common pitfalls include:

• Settling all international sales in GBP via Shopify's default FX rates, unwittingly accepting an additional 2%+ margin
• Unnecessary currency conversions into and out of GBP
• Not using multi-currency accounts to accept FX inflows and outflows efficiently

If a significant proportion of your sales are in EUR or USD, pairing a multi-currency account with a third-party acquirer who settles EUR or USD directly (without conversion to GBP) gives you control over when and at what rate you convert funds. This delivers much tighter margins than Shopify or most acquirers offer, whilst retaining balances in those currencies - useful for overseas suppliers or costs like Google Ads and Amazon sponsored listings.

Beyond reducing unnecessary conversions, combining a third-party acquirer with specialist FX providers and multi-currency accounts allows businesses to hedge predictable FX exposure, reducing risk and uncertainty. Through FX hedging mandates, clients can book forward contracts covering forecasted sales at budget rates anywhere from two weeks to four years ahead, providing certainty and flexibility to draw down at fixed rates when markets are unfavourable - or at spot rates when they're better. With GBP/USD swinging over 12% in the last year (as of December 2024), hedging could save similar magnitudes. If your international sales run into tens of thousands monthly, optimised FX setups can save more than the difference between Shopify Payments and a third-party acquirer.

The Verdict: Who Should Use What (And When)

Shopify Payments makes sense for:

• Early-stage and lower-volume stores: You're on Basic or Grow with monthly volumes under £100,000. Your priority is speed, simplicity, and cash flow. The 2% third-party fee (Basic) or 1% fee (Grow) makes external acquirers hard to beat unless you've negotiated exceptional rates.
• Lean teams with limited finance capacity: You lack a full-time finance manager or payments specialist and want minimal reconciliation and admin.
• Domestic-only or low FX exposure: Most sales are in GBP from UK cards, and FX isn't yet a significant factor.

Third-party acquirers make sense for:

• High-volume stores on Advanced (or close to Plus): Once you're processing £200,000+ monthly, especially on Advanced, the Shopify premium drops to 0.6%. Negotiate card processing around 1.0%–1.2% blended, and your total cost can undercut Shopify Payments by 0.2–0.5 percentage points.
• Merchants with strong negotiating positions: You're low-risk with predictable volume, clean chargeback history, and solid financials. Acquirers will compete for your business.
• High proportion of international sales: A significant slice of sales is in EUR, USD, or other currencies. Pairing a third-party acquirer with multi-currency collection and specialist FX can materially improve margins and control.
• Complex payment needs: You need multi-MID routing, local acquiring in multiple regions, advanced risk tools, or bespoke settlement terms beyond what Shopify Payments offers.

The Final Word: Calculate Before You Commit

Whichever route you choose, calculate your true blended rate over several months, including:

• Card percentage fees
• Per-transaction pence fees
• Shopify's third-party transaction fee (if applicable)
• FX conversion costs on international orders
• Any monthly gateway, PCI, or chargeback fees

Most growing retailers don't run these numbers until costs become painful and obvious. Calculate earlier, and you can choose between Shopify Payments and a third-party acquirer based on hard data, not guesswork - and start saving sooner.

No card acquirer makes deciphering fees or processing statements easy. That's why Stable offers no-obligation statement reviews and comparisons simple enough for any business to understand. Combined with FX hedging and multi-currency account products, online retailers gain the tools to not just save money and negotiate from strength, but also to optimise finance operations and mitigate risk.

About the Author

Craig Agutter is Group Operations Director at Stable Payments, where he leads strategy for card acquiring, multi-currency collection, and FX hedging solutions tailored to ecommerce businesses.

Craig began his career in 2008 at WorldFirst, the cross-border payment specialists, where he spent over 14 years helping online marketplace sellers manage currency exposure and optimise repatriation flows from international storefronts on Amazon, Walmart, and eBay. He eventually took P&L responsibility for their flagship World Account multi-currency collection product across Europe.

Following WorldFirst's 2019 acquisition by Ant Group (the payments affiliate of Alibaba Group and the company behind Alipay), Craig played an integral role in the three-year integration programme, unifying commercial operations and digital initiatives. He then spent three years at Equals Group PLC from 2022, working closely with senior leadership and executive teams to lead revenue operations before the company's acquisition by Railsr and a consortium of private equity firms.

At Stable, Craig brings deep expertise in payment operations, currency management, and strategic growth to help retailers and ecommerce merchants cut costs, reduce FX risk, and optimise their payment infrastructure.