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Shopify Transaction Fees: Definition & Formula [2023]

by Irene Leander
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Shopify Transaction Fees: Calculate, Optimize, And Succeed - OneCommerce

Setting up an online store with Shopify and struggling with dozen types of fees? While the platform is easy to use, it’s important to understand the transaction fees involved in running a Shopify store.

Shopify transaction fees are charged to merchants for every transaction that takes place in their store. The fees vary depending on the payment plan you choose.

Whether you’re just starting or looking to optimize your existing store, this comprehensive overview will equip you with the knowledge needed to navigate Shopify transaction fees effectively.

Let’s take a closer look!

💡 Recommended reading:

What Are Shopify Transaction Fees?

Shopify transaction fees refer to the charges imposed on each sale or transaction made through the Shopify platform. 

When you use Shopify to sell products or services, the platform deducts a percentage or fixed amount from each transaction as a processing fee. These fees are separate from other costs such as subscription plans or additional app charges.

Shopify transaction fees can be determined by your choice of pricing plan. Different plans offer varying transaction fee rates, with lower fees available on higher-tier plans.

By familiarizing yourself with the fee structure – including Shopify Disputes fees, exploring available Shopify pricing plans, and implementing effective strategies, you can deduct Shopify transaction fees for your business.

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Main Factors of Shopify Transaction Fees

Several factors can impact Shopify transaction fees for your online business. Here are some key factors to consider:

  • Shopify Pricing Plans: The pricing plan you choose for your Shopify store directly affects the transaction fees you will incur.
  • Payment Gateways: The payment gateway you utilize for processing transactions on Shopify can have an impact on the associated fees. Shopify Payments, the native gateway, may offer lower fees compared to external providers.

There are three different Shopify plans available, and each offers different features, including Shopify transaction fees, and needs to be evaluated thoroughly before choosing what’s best for you.

Pricing Plan Online Credit Card Rates In-Person Credit Card Rates (using Shopify POS) Additional Fees for External Payment Gateways
Shopify Starter 5% + 30¢ per transaction N/A 5.0% per transaction
Basic Shopify 2.9% + 30¢ per transaction 2.7% + 0¢ per transaction 2.0% per transaction
Shopify 2.6% + 30¢ per transaction 2.5% + 0¢ per transaction 1.0% per transaction
Advanced Shopify 2.4% + 30¢ per transaction 2.4% + 0¢ per transaction 0.5% per transaction
Shopify Plus (negotiable pricing) Custom transaction fee arrangement Custom transaction fee arrangement 0.15% per transaction

Shopify Plus Transaction Fees

When it comes to Shopify Plus transaction fees, the platform offers a unique and customizable approach. Let’s take a closer look at the transaction fee structure for Shopify Plus merchants and how it differs from standard Shopify plans.

1. Shopify Plus transaction fees structure

Shopify Plus is a premium version of Shopify tailored for large-scale enterprises.

While transaction fees for Shopify Plus vary based on specific agreements, it generally provides custom pricing and negotiated transaction fee rates. 

To determine the transaction fee structure for your Shopify Plus store, it is recommended to contact Shopify’s Sales or Support team directly. They will provide you with personalized assistance and guidance regarding the transaction fees applicable to your specific Shopify Plus account.

Shopify Plus is a premium version of Shopify tailored for large-scale enterprises

Shopify Plus is a premium version of Shopify tailored for large-scale enterprises

2. Shopify Plus transaction fees vs. Other Shopify plans

When comparing Shopify transaction fees for Shopify Plus with other Shopify plans, the primary focus is on the structure and rates of transaction fees. 

With Shopify Plus, merchants have the advantage of negotiating customized transaction fee structures based on their specific business needs and sales volume. This flexibility allows them to potentially secure more favorable transaction fee rates compared to the standard fees associated with other Shopify plans.

In contrast, other Shopify plans typically have predefined transaction fee rates that apply to all merchants. These rates may vary depending on the pricing plan and the payment gateway used.

How to Calculate Shopify Transaction Fees?

Shopify transaction fees are calculated based on the payment method used by your customers, depending on which payment method is chosen by customers and also which Shopify pricing plan your store is subscribed to.

Here is the step-by-step guide to calculating Shopify transaction fees:

💡 Shopify Transaction Fees (per sale) = Total Transaction Amount x (Shopify Credit Card Rate + External Payment Provider Fee) + Additional Cost (optional)

1. Shopify credit card rate

This is the fee that Shopify charges you to accept major credit cards in your store. This rate varies depending on your pricing plan and whether the transaction is online or in-person.

For example, referring to the table above, if you have the Basic Shopify plan, then the Shopify credit card rate is 2.9% + $0.30 for online transactions and 2.7% for in-person transactions.

2. Third-party payment provider fee

Shopify charges you a fee when you use an external payment gateway, other than Shopify Payments, to process customer payments. This fee also varies depending on your pricing plan.

For example, if you have the Basic Shopify plan and use PayPal to accept payments, then the third-party payment provider fee is 2%.

3. Additional Cost

The additional cost is any extra fee that your payment gateway might charge you for using their service. This cost is optional and depends on the terms and conditions of your payment gateway.

For example, PayPal might charge you a currency conversion fee or a cross-border fee if you accept payments in a different currency or from a different country.

 Let’s go through a practical example of how to calculate transaction fees:

You have a Shopify store that sells T-shirts for $20 each. You have the Basic Shopify plan and you use PayPal as your payment gateway. Here is how you would calculate the Shopify transaction fees for one sale:

  • Total Transaction Amount = $20
  • Shopify Credit Card Rates = 2.9% + $0.30 for online transactions
  • External Payment Provider Fee = 2% for PayPal
  • Additional Cost = $0.30 for PayPal cross-border fee (assuming the customer is from a different country)
  • Shopify Transaction Fees (per sale) = $20 x (0.029 + 0.02) + $0.30 + $0.30 = $1.48

Therefore, for one sale of $20, you would pay $1.48 in Shopify transaction fees. This means you would keep $18.52 profit.

Is Shopify Payments a Good Option for Payment Gateway?

1. What are Shopify Payments?

Shopify Payments is a built-in payment gateway provided by Shopify that allows merchants to accept payments directly on their online stores

There are no extra transaction fee charges with Shopify Payment, unlike other external payment gateways. However, if you use Shopify Payments as your payment processor, you can expect to pay standard credit card processing fees.

Therefore, you can calculate Shopify transaction fees as you use Shopify Payments based on this formula:

💡 Shopify Transaction Fees (per sale) = Total Transaction Amount x (Shopify Credit Card Rate + Additional Cost)

2. Why Should You Be Using Shopify Payments?

When it comes to managing transaction fees for your online business, choosing the right payment solution is crucial. Shopify Payments offers a comprehensive payment gateway integrated directly into the Shopify platform.

Let’s explore the advantages and important factors to consider when using Shopify Payments for your business.

Benefits

  • Simplified Setup: Easily set up a payment gateway without the need for third-party integrations or additional accounts.
  • Seamless Integration: Shopify Payments is fully integrated with the Shopify platform.
  • Cost Savings: Potentially save on transaction fees compared to using external payment processors.
  • Enhanced Security: Shopify Payments prioritizes security and fraud prevention, providing a secure payment processing environment for both you and your customers.
  • Unified Dashboard: View and manage all aspects of your payments, including transaction history, settlements, and refunds, all within the Shopify admin dashboard.

Considerations

  • Availability by Country: Shopify Payment is currently available in certain countries.
  • Eligibility and Approval: You need to meet certain eligibility criteria and get approved by Shopify. This may include factors such as your location, business type, and compliance with Shopify’s policies.
  • Payout Schedule: Shopify Payments has a predefined payout schedule, which determines how often funds from your sales are deposited into your bank account.

Conclusion

Shopify transaction fees are not something to ignore or overlook.

They can have a significant impact on your bottom line and your online business success. By understanding how they work and how to manage them, you can optimize your profit margins and focus on growing your customer base and your brand.

You can also use some of the tips and tools that we shared with you to reduce your transaction costs and increase your conversions.

We hope this guide has been helpful and informative for you. If you have any questions or feedback, feel free to contact OneCommerce Blog anytime!

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