Best Payment Gateways for Shopify Stores in Australia

Choosing a payment gateway is one of the few Shopify decisions that affects your business every single day, on every single sale. Get it wrong and you're either paying more in fees than you need to, losing customers at checkout, or dealing with settlement delays that hurt cash flow.

Most comparisons of payment gateways treat this as a generic ecommerce question. It isn't. Shopify has its own fee structure that changes the calculation, and if you don't understand how it works, you can end up paying two lots of transaction fees without realising it.

After 13 years building and maintaining ecommerce websites for Australian businesses, here's what actually matters when choosing a payment gateway for a Shopify store — and where the generic advice gets it wrong.

The Shopify-specific mechanic most guides miss

Shopify charges an additional transaction fee — separate from your payment processor's fee — on every order that doesn't go through Shopify Payments. Depending on your plan, that's typically an extra 0.5% to 2% on top of whatever Stripe, PayPal, or another gateway charges you directly.

This changes the maths entirely. A gateway that looks cheaper in isolation can end up more expensive once you factor in Shopify's third-party transaction fee. It's the single most common thing store owners get wrong when comparing options, and it's rarely mentioned in generic "best payment gateway" content because it's specific to Shopify's platform economics, not the payment industry generally.

The practical takeaway: if Shopify Payments is available in your country (it is in Australia), you need a genuinely good reason to use something else instead — not just a slightly better headline rate on the processor itself.

Shopify Payments

Shopify Payments is Shopify's own gateway, built on Stripe's infrastructure, and it's the default recommendation for most Australian stores.

Why it works well:

• No additional transaction fee from Shopify (since you're using their own gateway)
• Fully integrated — refunds, chargebacks, and reporting all happen inside Shopify admin without switching tools
• Standard rates for Australian merchants sit around 1.75% + $0.30 for domestic cards, with international cards slightly higher
• Fraud analysis built in at no extra cost

Where it falls short:

• Not available in every country, so if you sell internationally and need a local entity or gateway elsewhere, you may need a second option
• Less flexible for complex subscription billing setups compared to a dedicated tool like Stripe used directly through the API
• Settlement is typically next business day for standard accounts, which is fine for most stores but worth checking if cash flow timing matters to you

For a straightforward Australian store selling primarily to Australian and international customers with cards, Shopify Payments is usually the right starting point, and often the only gateway you need.

Stripe

If you're using Stripe directly (rather than through Shopify Payments, which is Stripe under the hood anyway), this usually only makes sense if you need functionality Shopify Payments doesn't offer — custom subscription logic, marketplace-style split payments, or a checkout experience outside Shopify's standard flow.

Considerations:

• You'll pay Shopify's third-party transaction fee on top of Stripe's own rates, so this needs to be justified by functionality, not cost
• Excellent developer documentation and flexibility if you're running custom logic
• Strong global reach if you're expanding beyond Australia

For most standard Shopify stores, using Stripe directly instead of Shopify Payments doesn't make financial sense. It's a tool for specific technical requirements, not a default choice.

Afterpay and Zip (Buy Now, Pay Later)

Australian shoppers have a strong preference for BNPL options at checkout, and this is one area where local buying habits genuinely differ from other markets. Offering Afterpay or Zip alongside a card gateway isn't just a payment option — it's frequently a conversion driver, particularly for fashion, homewares, and mid-ticket products.

What to know:

• Both integrate as add-on payment methods alongside Shopify Payments, not as a replacement
• Fees are higher than standard card processing — typically in the 4–6% range — but the conversion lift often outweighs the cost for the right product categories
• You get paid the full order value up front; the BNPL provider takes on the repayment risk
• Worth A/B testing whether displaying "as low as $X per fortnight with Afterpay" pricing on product pages improves conversion for your specific catalogue

If your average order value sits in the $75–$500 range, it's worth testing at least one BNPL option. Below that range the fee often isn't justified by the conversion benefit; above it, customers are more likely to have other financing preferences.

PayPal

PayPal remains a trust signal for a portion of Australian shoppers, particularly those less comfortable entering card details directly on unfamiliar sites.

Considerations:

• Adds a small additional transaction fee from Shopify if used alongside Shopify Payments
• Familiar checkout flow for customers who already have PayPal accounts
• Useful as a secondary option rather than a primary gateway — most stores see the majority of transactions go through card payments regardless

Worth including as an option for customer trust and choice, but rarely worth building a payment strategy around exclusively.

Comparison at a glance

How to choose for your store

The decision framework is simpler than most comparisons make it look:

1. Start with Shopify Payments as your primary gateway unless you have a specific reason not to.
2. Add a BNPL option if your average order value and product category suit it — test rather than assume.
3. Add PayPal if your customer base skews toward buyers who prefer it, or if you're seeing cart abandonment that exit surveys or heatmaps suggest is checkout-related.
4. Only look at Stripe direct integration or other alternatives if you have a genuine technical requirement Shopify Payments can't meet — not for a marginally better headline rate.

Common setup mistakes I see

A few issues come up repeatedly when reviewing client stores that have grown their payment setup piecemeal over time:

• Running a second card gateway "just in case," unaware of the extra Shopify fee — this quietly erodes margin on every single transaction, often unnoticed for months.
• Not testing the mobile checkout flow for each payment method — BNPL widgets in particular can render awkwardly on some themes if not configured properly.
• Ignoring settlement timing when it matters for cash flow — worth checking if you're a smaller operation relying on incoming funds to cover supplier payments.
• Never revisiting the setup after initial launch — payment gateway needs change as a store grows or expands into new markets, and last year's setup isn't always right for this year's business.

Getting your Shopify payment setup right

Payment gateway choice is a small decision with an outsized, compounding effect on margin and conversion. Getting it right at setup — or auditing an existing store that's drifted into an unnecessarily expensive configuration — is one of the highest-value, lowest-effort reviews a Shopify store owner can do.

If you'd like a second opinion on your current payment setup, or you're building a new Shopify store and want it configured correctly from day one, I offer Shopify development and ongoing store support for Australian businesses.

Related reading: Best Payment Gateways in Australia — a broader look at payment gateway options across platforms, not specific to Shopify.

0

0