Shopify vs PayPal: Ultimate Showdown In POS And Payment
By Sam Nguyen
Shopify vs Paypal: Understanding The Article’s Main Purpose
While numerous articles are comparing Shopify and Paypal’s payment gateways, there is a need for more resources that delve into their POS systems. In this article, we will conduct an in-depth analysis with the most updated information on what Shopify and Paypal both have: payment processor and point-of-sale system to determine which platform is better.
Key Takeaways
- Shopify is the optimal choice for businesses seeking an all-encompassing ecosystem that includes a comprehensive point-of-sale system and a payment processor that seamlessly integrates with their Shopify store.
- PayPal is an ideal option for merchants requiring a trustworthy international payment processing solution for their online transactions and venturing into in-person sales with a limited budget.
Shopify vs Paypal: Quick Comparison
Shopify stands out as a comprehensive solution for businesses, offering a complete ecosystem to support businesses of all types and sizes. With its e-commerce platform and point-of-sale system named Shopify POS, Shopify provides a seamless experience for merchants to manage their retail operations across various channels, including online, social media, and physical stores, with the added convenience of its own payment processor – Shopify Payments.
PayPal is globally recognized for its reliable payment services and has recently introduced its own POS system – PayPal Zettle. PayPal simplifies payment acceptance for businesses, enabling them to seamlessly process online and in-person transactions.
It’s important to note that, unlike Shopify, PayPal doesn’t offer its ecommerce platform. Still, it aims to bridge the gap with the ability to integrate with various existing platforms, including Shopify.
Shopify vs. Paypal: Pros and Cons
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Shopify vs. Paypal: Detailed Comparison
Point-of-sale (POS) system
Shopify POS and PayPal Zettle both equip merchants with essential features for effectively selling in-person. However, they differ in certain aspects.
Pricing
Shopify POS
- Software fees:
- $0/month for Shopify POS Lite
- $89/month/location for Shopify POS Pro
- To use Shopify POS, you need to subscribe to a Shopify pricing plan, with ranges from $5 to $399/ month.
- Hardware fees:
- $39 for a card reader
- $219 for a retail kit
- $399 for Shopify POS Go (a handheld mobile device with a built-in card reader and a barcode scanner).
- Shopify Hardware Rental: You can rent hardware with fees as low as $9/day.
- Processing fees: From 2.4% + 0¢ to 2.7% + 0¢, depending on your Shopify plan
Paypal Zettle
- Software fees: $0. To use Paypal Zettle, you need a Paypal account, which could be created for free.
- Hardware fees:
- $79 for a card reader
- $199 for a Zettle Terminal (Paypal Zettle handheld mobile device)
- Processing fees: From 2.29% + 9¢ to 3.49 + 9¢ depending on the payment method
The Verdict
Shopify POS has a slight advantage over Paypal Zettle. Both offer a free plan for small businesses or startups, allowing them to save money and get started quickly. Shopify POS also provides an Advanced plan for companies with more complex needs, making it a more versatile option for growth.
While Paypal may have lower processing fees at first glance, Shopify POS offers the benefit of free transaction fees when using Shopify Payments, saving merchants a lot of money.
Shopify POS hardware is more budget-friendly than Paypal Zettle, making it a more cost-effective solution for merchants to accept payments at their retail store or on the go. In addition, Shopify POS allows merchants to rent hardware or bundle kits for selling at temporary locations, eliminating the need for upfront costs. Unfortunately, Paypal Zettle does not offer this deal.
Key features
Synchronize online and offline store
Shopify POS
Shopify POS seamlessly connects with your Shopify store, facilitating smooth communication and data sharing of products, orders, inventory, sales, and customer information. This integration allows you to use Shopify as a centralized system for both online and in-person sales, eliminating manual data entry and reconciliation, saving time, and reducing errors.
Online orders can be easily accessed and fulfilled within the POS system, streamlining the order management process and providing a consistent customer experience across all sales channels.
Paypal Zettle
Since Paypal Zettle does not have its own ecommerce platform, it relies on integrating with other platforms like BigCommerce, Shopify, and WooCommerce to sync sales, inventory, and customer data with your ecommerce tools so you can see product data in real-time across platforms.
The Verdict
Shopify POS outperforms Paypal Zettle in syncing physical stores with an online store.
Shopify POS and Shopify are within a cohesive ecosystem, allowing them to connect seamlessly. Shopify acts as the back office for managing the business, ensuring that any updates to inventory, pricing, or customer details on the online store are automatically reflected in the POS system. This integration guarantees accurate and real-time data across all channels.
In contrast, Paypal Zettle and ecommerce platforms operate as separate systems, which can lead to inefficiencies. Certain inventory or order fulfillment features may be missing when using an API to connect Paypal Zettle with an ecommerce platform. This can result in a disorganized customer experience and a fragmented and inaccurate view of your business.
Inventory management
Shopify POS
As mentioned above, Shopify retailers can enjoy a fully synchronized inventory across their physical stores and online platforms with Shopify POS.
With Shopify POS Lite, retailers gain access to essential inventory management features, enabling them to track and update inventory across all channels and locations.
Shopify POS Pro offers the exclusive Stocky app for advanced inventory management capabilities. This powerful helps retailers quickly check inventory availability through scanning, transfer stock between locations, receive demand forecasts and low-stock alerts, and perform comprehensive inventory analysis for informed business decisions.
Paypal Zettle
With Paypal Zettle, merchants can import products in bulk from existing spreadsheets and create product collections. The platform also offers automatic stock level updates, allowing merchants to keep track of their inventory effortlessly.
Additionally, merchants can activate inventory tracking and receive alerts when their stock runs low, ensuring they always have sufficient inventory.
The Verdict
It’s a tie between the two platforms as both offer robust features for efficient inventory management. Shopify POS excels in multi-location management, while Paypal Zettle provides advanced features in its free plan.
Omnichannel selling
Shopify POS
Shopify POS enables merchants to pursue an omnichannel strategy by offering options such as “Buy in-store, ship to customer,” “Buy online, exchange, and return in-store,” and “Local pick-up and local delivery.” These features provide an excellent shopping experience for customers while maintaining accurate inventory management.
Paypal Zettle
In the evolving digital landscape characterized by convenience and personalized options, Paypal Zettle keeps up with this trend by enabling merchants with multiple locations to provide services such as “In-store pick-up” and “Curbside pick-up” for their customers.
The Verdict
Shopify takes the lead over Paypal in omnichannel selling capabilities. With Shopify POS, merchants have the built-in ability to provide customers various shopping options, which improve the overall experience and empower businesses to build stronger relationships, and foster loyalty.
In contrast, Paypal Zettle doesn’t offer the same level of convenience and has no integration options with third-party apps for such functionalities.
Apps Integrations
Shopify POS
Shopify POS stands out with its extensive integration capabilities, offering access to the Shopify App Store with over 8,000 apps. This enables merchants to enhance the POS functionality in inventory management, order fulfillment, customer loyalty programs, accounting, customer support, analytics, marketing, and more.
Paypal Zettle
Paypal Zettle can integrate only with selected apps, like QuickBooks, for accounting. This restricts its functionality to the built-in features and makes it challenging to expand and cater to the specific needs of your business.
The Verdict
Shopify POS is the superior choice due to its extensive range of apps and integrations that cater to the specific needs of merchants. In contrast, Paypal Zettle is very limited in integration capabilities.
Customer Support
Shopify POS
Shopify POS offers merchants extensive support 24/7 through email, phone, and live chat. Their dedicated support team is always ready to assist with any issues or concerns, ensuring quick resolution and allowing merchants to focus on their business operations.
Paypal Zettle
Paypal Zettle provides support during weekday business hours, from 9:00 AM to 5:00 PM. Users can seek assistance through chat, phone, or email when encountering problems or inquiries.
The Verdict
Shopify POS excels in providing superior support to its merchants. With their 24/7 live support, they can promptly address urgent needs and assist in problem-solving, ensuring merchants can quickly resume their business operations. On the contrary, Paypal lacks weekend support, which means merchants may experience longer waiting times for issue resolution.
Payment Processing
Shopify and PayPal are frequently compared when it comes to payment processing. We will explore Shopify Payments and Paypal’s essential aspects to help you gain a deeper understanding of these two payment processors.
Fees
| Shopify Payments | Paypal | |
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| Transaction fees | Free | None |
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The Verdict
PayPal’s transaction fees are generally higher compared to those of Shopify Payments. That said, opting for Shopify Payments can be more budget-friendly than using PayPal.
Additionally, Shopify Payments offers a more streamlined checkout experience; customers can complete their purchases without leaving your website. In contrast, when using PayPal, customers are redirected to PayPal’s platform to finish the transaction, which might lead to a lower conversion rate.
However, it’s noteworthy that PayPal partnered with Shopify, allowing merchants to accept Paypal payments within Shopify Payments.
Chargebacks and Payouts
Shopify Payments
When a bank issues a chargeback, merchants are also subjected to a processing fee of $15. If the chargeback is eventually resolved in the merchant’s favor, Shopify refunds this fee. It’s important to keep in mind that the review process for the chargeback can take up to 75 days after the response has been submitted.
Regarding payouts, when merchants transfer money from Shopify Payments to their bank accounts, the funds aren’t immediately available. The bank typically needs time to process and deposit the funds into the account. This processing time can vary, but it generally takes 1-3 business days, depending on the bank.
Paypal
PayPal imposes a fee of $20 on US businesses for each chargeback. The resolution process for chargebacks usually spans a few weeks, but it can extend to 75 days or even longer in some cases.
Regarding payouts, the standard transfer typically completes within one business day. However, depending on the bank’s process, it may take 3-5 business days for the funds to be deposited into the bank account. If a transfer starts on a holiday, an extra business day will be needed for the funds to appear in the account. It is also important to note that each payout is subject to a fee of $20.
The Verdict
Compared to PayPal, Shopify Payments charges lower fees for both chargebacks and payouts. In addition, it is more efficient in processing payouts, making funds available to merchants in a shorter time frame.
Integrations and Availability
Shopify Payments
Shopify Payments is integrated within Shopify stores in supported countries and is exclusive to Shopify. This means that it cannot be used with other e-commerce platforms, as it is specifically tailored for Shopify.
Additionally, Shopify Payments is available in 23 countries. You can refer to this page for a detailed list of supported countries.
Paypal
On the other hand, PayPal is one of the default payment providers for Shopify. When you create a Shopify store, you automatically receive a PayPal Express Checkout account associated with the email address you used for registration. Notably, PayPal’s integration is not limited to Shopify; it’s also built into platforms such as Prestashop and WooCommerce. Furthermore, it can be easily connected with various other platforms, including Squarespace, BigCommerce, Wix, Lightspeed, and more, serving as a versatile payment gateway.
PayPal is available in over 200 countries. This makes it an excellent option for sending and receiving payments across borders.
The Verdict
PayPal has the upper hand in terms of integrations and global availability compared to Shopify Payments. However, Shopify Payments, a dedicated payment gateway for Shopify, offers substantial benefits to merchants using the Shopify platform.
Shopify Payments vs. Paypal: FAQs
When setting up a Shopify store, Shopify automatically creates a PayPal Express Checkout account using the email address associated with your store. If you already have a PayPal account linked to that email address, then you are able to receive payments immediately with PayPal.
To set up Paypal on your Shopify store, please follow these steps:
- From your Shopify admin, go to Settings > Payments.
- In the Additional payment methods section, find PayPal.
- Click Manage.
- Click Deactivate PayPal Express Checkout.
- Click Deactivate PayPal Express Checkout again to confirm.
- Click Activate PayPal Express Checkout.
- Enter the email address for your PayPal account, and then click Next.
- Enter the password for your PayPal account, and then click Log In.
- On the PayPal permissions page, click I Give Permission.
- On the PayPal confirmation page, click Go back to Shopify.
- Make a test transaction to make sure everything is set up properly.
Bottom Line
That’s a comparison of how Shopify POS fares against PayPal regarding payment processing and point-of-sale. If you are in search of a cohesive ecosystem that encompasses an e-commerce platform, its own payment gateway, and a comprehensive point-of-sale system, Shopify emerges as a superior choice compared to PayPal.
