Shopify vs PayPal: Which solution does your business need?
On the surface, the comparison might seem a little unusual. After all, Shopify and PayPal offer two very different toolkits for different use cases.
Shopify is a comprehensive commerce platform, while PayPal is a convenient tool for payment processing and peer-to-peer money transfers.
However, there are some overlapping elements to consider. Both tools have their own payment processing capabilities, and both offer point of sale solutions.
Today, we’re taking a close look at the comparable features of PayPal and Shopify to help you make the right decision for your business.
Quick Verdict
- Shopify is the ideal choice for businesses looking for an all-in-one ecosystem for commerce, with a comprehensive payment processor, point of sale system and website building platform.
- PayPal is a great solution for merchants in need of a trustworthy solution for international payment processing, and budget-friendly in-person transaction management.
Table of contents
Shopify vs PayPal Pros and Cons
Shopify Pros 👍
- Exceptional website building tools
- Support for omnichannel and multinational selling
- User-friendly mobile POS tools
- Flexible payment methods and checkout process.
- No transaction fees with Shopify Payments
Extensive range of integrations - 24/7 customer support.
First party POS hardware
Shopify Cons 👎
- Shopify Payments and Shop Pay are limited to certain countries
- POS and payment processing are limited to Shopify customers
- Limited offline functionality for POS
PayPal Pros 👍
- Excellent reputation across more than 200 countries.
- Integrations with multiple ecommerce platforms.
- Free POS software subscription.
- Easy-to-use technology.
- First-party POS hardware
- Multi-location and multi-channel support.
- Support for various payment methods and currency conversion.
PayPal Cons 👎
- PayPal Zettle requires a PayPal account.
- Some issues with fund holding and account freezing.
- Limited customer support.
- No website building capabilities.
Shopify vs PayPal: The Quick Comparison
Both Shopify and PayPal are excellent tools for any business owner looking to run an online store or omnichannel sales strategy.
What is Shopify POS?
Shopify is one of the most comprehensive and popular ecommerce platforms available. With a Shopify store, business owners can sell any kind of product including physical and virtual items, or subscriptions.
Additionally, Shopify features it’s own point of sale system (Shopify POS), allowing for robust omnichannel sales opportunities. There’s even a dedicated payment processing system in the Shopify ecosystem, known as Shopify Payments.
What is PayPal POS?
PayPal, on the other hand, is world-renowned for its convenient online payment services. It’s one of the most trustworthy payment providers around, supporting a wide range of payment options. Additionally, it has its own POS system: PayPal Zettle.
Unlike Shopify, however, PayPal doesn’t have its own ecommerce platform. However, online business owners can integrate the solution with other platforms, including Shopify.
Shopify vs PayPal: The POS Solutions
Quick verdict: While PayPal is the cheaper option, Shopify has a slight advantage in terms of scalability, as it allows customers to upgrade to a more advanced plan. Shopify can also offer more hardware options, and cheaper payment processing fees in some cases.
Both PayPal Zettle and Shopify POS are excellent tools for smaller business owners looking to take transactions into the brick and mortar world. They both give merchants excellent tools for selling in-person, but they differ in certain aspects.
Let’s start by looking at the pricing.
Shopify POS Pricing
Shopify POS is available in two forms: Shopify POS Lite and Shopify POS Pro. The Lite solution is available on virtually every Shopify pricing plan, including the Starter package for $5 per month. The premium solution is available for $89 per month per location, or it comes built into Shopify Plus, which starts at $2,000 per month.
Although the Lite service is offered at no extra cost to Shopify users, you do need a Shopify plan, ranging from $5 to $399 per month. Hardware, on the other hand, varies in price depending on the functionality you need. Card readers start at $39, while retail kits cost $219, and Shopify’s mobile POS, “Shopify POS Go” costs $399.
You can also rent hardware from Shopify starting at $9 per day. Processing fees range form 2.4% to 2.9% depending on your Shopify plan.
PayPal POS Pricing
Unlike Shopify, PayPal offers an entirely free subscription or its POS software. While you do need a PayPal account, you can create one for free.
Hardware costs start at around $79 for a card reader, or $199 for a full Zettle terminal (handheld mobile device).
Shopify vs PayPal: Key POS Features
Quick verdict: Shopify outperforms PayPal in terms of overall features and functionality. It offers a wide range of solutions, from inventory management to marketing tools. Plus, it includes access to Shopify’s store builder.
From a features perspective, Shopify and PayPal have some overlapping capabilities. They both support multiple payment methods, from credit card and debit card payments, to invoices, mobile wallet payments (Apple Pay and Google Pay) and gift cards. Plus, they both include inventory, sales, order, and customer management.
However, Shopify has a far more robust overall feature set. It includes tools for marketing, such as integrations with social media and Google merchant center. It also features employee management tools, customizable checkout experience, and powerful customer segmentation.
Additionally, Shopify POS includes access to Shopify’s comprehensive ecommerce store builder, where you can create a powerful online store, with customizable templates, advanced marketing capabilities, and branding tools.
While PayPal has some great features, such as tools for multi-channel and multi-store inventory management, it lacks many advanced management capabilities.
It also doesn’t come with access to its own online store builder. Instead, small businesses need to integrate PayPal with an existing store builder, such as BigCommerce, Wix, WooCommerce, or Shopify.
You may also find certain order fulfillment and inventory management tools are missing when you integrate PayPal’s POS technology with your store.
Inventory Management
Quick verdict: PayPal and Shopify’s inventory management tools are pretty similar. However, Shopify excels in offering multi-location and channel management tools. Alternatively, PayPal offers more features within its free plan.
One of the best things about Shopify POS, is you can access a fully synchronized and aligned set of inventory management tools across all of your physical stores and online platforms.
Even the Lite version of Shopify POS comes with essential inventory management features that sync across your platforms to track all channels and locations.
Plus, Shopify POS Pro is fantastic for tracking inventory availability with barcode scanning. You can even transfer stock between locations, set up low-stock alerts, and receive demand forecasts to help you make intelligent business growth decisions.
With PayPal Zettle, the inventory management features are also quite good. You can import product information into the system in bulk with spreadsheets. Plus, there’s support for automatic stock level updates through your PayPal business account.
You can also receive alerts when you’re running low on stock, and access basic insights into offline and online shopping trends.
Omnichannel Selling
Quick Verdict: Shopify outperforms PayPal in terms of omnichannel capabilities, with various shopping options to offer customers. PayPal doesn’t have quite as many integrations available for different channels and order fulfillment options.
Ultimately, Shopify is one of the best platforms for omnichannel selling available – at least in our opinion. The solution enable merchants to pursue a fully omnichannel strategy in a range of ways.
You can sell in-store, through marketplaces and social media, and on your own website. Plus, you can give customers options like “buy in store and ship to customer” or “buy online and return in store”. There are even local pickup and delivery options.
PayPal also offers some omnichannel capabilities, with integrations for ecommerce platforms and certain marketplaces. It also supports merchants with in-store pickup and curbside pickup options. However, the capabilities aren’t quite as advanced as they are on Shopify.
Apps and Integrations
Quick verdict: Shopify store owners have access to many more integrations to enhance the customer experience, reduce cart abandonment rates, and increase sales.
If you want to unify various tools, both Shopify and PayPal are great options. Shopify is one of the most flexible platforms around, with thousands of apps and add-ons available through its online marketplace.
The Shopify platform supports integrations with payment gateways, accounting tools, marketing, and sales solutions.
PayPal Zettle also offers some broad integration options and API access. However, it has fewer connection options available. Mostly, PayPal integrates with ecommerce platforms and selected apps like QuickBooks for your accounting needs.
Customer Support
Quick Verdict: Shopify offers a lot more support to merchants using the Shopify platform and other tools. You can even hire a Shopify Expert to help you set up your payment system or build an attractive online store.
If you encounter issues when you use Shopify Payments, or the POS solution from Shopify, you can access a range of FAQs, online guides, blogs, and videos. The Shopify customer service team also offers 24/7 assistance through phone, live chat, and email.
PayPal Zettle also offers relatively fast support, though usually its restricted to certain business hours, throughout weekdays, depending on your location. You can seek assistance through chat, phone or email, or check PayPal’s online resources.
Shopify vs Zettle: Payment Processing
Quick verdict: PayPal’s transaction fees are a little higher than those offered by Shopify payments. Shopify Payments also offers a more streamlined checkout experience, and charges companies a lower chargeback fee. The payouts can also be quicker with Shopify.
 |  | |
|---|---|---|
| Transaction fees | None | None |
| Credit card fees | 2.4-2.9% plus 30 cents for online transactions.2.4% to 2.7% for in-person payments (Depending on your Shopify plan) | 5.4% plus 30 cents for online transactions. 2.29% to 3.49% for in-person payments. |
| Currency conversion fees | 1.5% for US merchants or 2% in other regions. | 4% when sending peer-to-peer money, or paying for goods and services. Or 3% on other transactions. |
| Chargeback fee | $15 | $20 |
| Payout time | Usually 1-3 business days | 1-5 business days |
As mentioned above, Shopify and PayPal aren’t just comparable for their point of sale systems. They also both act as a “payment platform” with built-in payment processing capabilities. Both tools combine ease of use with flexibility, and extensive seller protection.
However, with Shopify, customers can complete transactions without having to lead your website, whereas PayPal payments require some redirection, which can harm the user experience.
The chargeback fees on both platforms are a little different too. Shopify subjects merchants to a fee of $15 while their dispute resolution teams works on assessing the chargeback requests. This fee can be refunded if the chargeback is resolved in the merchant’s favor.
PayPal charges US merchants $20 for each chargeback, and this fee can also be refunded if the issue is resolved in the merchants favor.
For payouts, Shopify Payments users can transfer money directly into their bank account, and usually receive money within 1-3 business days. PayPal takes up to 3-5 business days to transfer a payment, depending on your bank account and bank processes.
Integrations and availability: Shopify Payments vs PayPal
Quick verdict: PayPal is far more flexible as a payment processing solution than Shopify. It offers access to payment solutions in mor than 200 countries, and integrates with various platforms.
Shopify Payments is directly integrated into the Shopify ecommerce platform and is exclusive to the Shopify landscape. Unfortunately, this means it can’t be used with other ecommerce platforms. However, it is available in more than 23 countries and regions.
PayPal, on the other hand, is far more flexible and accessible. It’s one of the default payment processing options for Shopify merchants, offering instant access to the PayPal Express Checkout service.
Plus, PayPal can work with a variety of other platforms, from Squarespace and BigCommerce, to Wix and WooCommerce.
Compared to Shopify, PayPal is also available in more than 200 countries, making it one of the top choices for international merchants.
Shopify vs PayPal: Finishing Thoughts
Ultimately, if you’re looking for an excellent payment solution and POS service, both Shopify and PayPal are great choices.
PayPal is the more flexible option if you’re looking for simple payment processing capabilities, though the transaction fees can be a little higher.
Alternatively, Shopify is a great choice if you’re looking for an omnichannel sales solution with a robust POS toolkit, and fantastic features for boosting your conversion rates. It’s also the ideal choice if you want access to a comprehensive website and store builder.
FAQ
Yes, PayPal is one of the default payment processing solutions available for Shopify store owners. However, you will need to pay additional fees if you choose to use any payment processor outside of Shopify Payments on your ecommerce store.
When you create a Shopify store, you’ll automatically have access to the PayPal Express Checkout option. You can activate this service by going to your Shopify admin page, clicking on “Settings”, then “Payments” and choosing “PayPal”.
Technically, you don’t need to pay a subscription fee to access PayPal, but you will need to pay transaction fees, and currency conversion fees. There may also be fees to transfer money to your bank account. Plus, there’s an extra fee to use PayPal with Shopify.
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