When running an e-commerce site, offering a rich variety of payment methods improves customer convenience and can be a key factor affecting conversion rate. Among the many payment methods available, PayPal — widely used around the world — is also an effective option for Shopify stores. This article explains in detail the benefits, setup method, and points to note when adding PayPal to Shopify. Please read on to consider how adding PayPal, based on your store's characteristics and customer base, could contribute to your business growth.
The blog article below summarizes payment methods available on Shopify besides PayPal. If you're considering adding more payment methods, please use it as a reference.
What Is PayPal?
PayPal is a payment service that lets you safely pay and send money online. It's used in over 200 countries and regions around the world and has been adopted by many businesses, including e-commerce sites and web services. It also supports over 100 currencies.
By registering a credit card or bank account with their PayPal account in advance, users can complete a purchase without sharing that information with the merchant. This makes it possible to protect personal information while enabling smooth, secure payments.
PayPal is a payment method suited to both domestic e-commerce stores in Japan and cross-border e-commerce aimed overseas.
To use PayPal on Shopify, you need to register for a PayPal Business account.
Benefits of Adding PayPal
Helps Prevent Cart Abandonment
According to a survey by Baymard Institute, having too few payment options is the 10th most common reason for cart abandonment. If your Shopify store is the only place a product can be purchased and a customer really wants it, it may not matter much if the payment type they usually use isn't available. However, for products that are available elsewhere, or when a customer's purchase intent isn't very strong yet, this can cause them to go to a different store or product instead.
As a countermeasure against cart abandonment, if you're able to increase your payment options, it's worth doing so.
The article below introduces cart abandonment countermeasures you can implement on Shopify beyond increasing payment types.
Easy to Set Up
Adding PayPal is very simple. As explained in detail in the [How to Add PayPal to Your Shopify Store] section below, you can start using it just by creating a PayPal Business account and integrating it with Shopify.
Low Cost
There's no setup fee, monthly fee, or transaction fee when using PayPal. The only fee incurred is the payment processing fee, which is one of the reasons it's affordable to get started.
PayPal May Be Available Even for Products Prohibited Under Shopify Payments
Shopify Payments has a list of prohibited products defined in its terms of service. If you sell such a product, PayPal may be available as an alternative payment method.
We ourselves have had a case in the past where a client's product couldn't be sold via Shopify Payments, but after consulting with PayPal it became possible to sell it.
If you handle a prohibited product, it may be worth checking with PayPal once about whether it can be sold.
Thorough Security Measures
PayPal focuses heavily on protecting payment information, so merchants don't need to directly handle a customer's credit card or bank account information. The service complies with PCI DSS (an international security standard for protecting credit card information). It also has a seller protection program available in the event of a fraudulent transaction. This provides a secure trading environment.
Also Supports Subscriptions and Deferred Payment
Shopify's subscription apps and pre-order apps with a deferred payment feature are implemented using a Shopify mechanism called purchase options. Due to constraints of that mechanism, the only payment methods available for subscription products or deferred-payment products are Shopify Payments or PayPal.
PayPal (PayPal Business Account) Fees
Since a PayPal Business account is required to add PayPal to your Shopify store, this section introduces the various fees for a PayPal Business account.
Fees are mainly incurred at the following times.
Payment Processing Fees
For Domestic Transactions
- 3.60% + 40 yen per transaction of the transaction amount
- Applies to: transactions where both the sender and recipient are registered as residents of Japan
For International Transactions
- In addition to the domestic transaction fee (above), the following fees are added:
- Additional percentage fee: 0.50%
- Additional fixed fee: varies depending on the receiving currency
- Applies to: transactions where the sender and recipient are registered as residents of different countries
Transaction Fee
Free
A transaction fee is a fee incurred for payment methods other than Shopify Payments. The blog article below explains in detail the transaction fee and the transaction fee rate depending on your Shopify plan. Please use it as a reference.
Withdrawal Fee (Withdrawing from PayPal Balance to a Japanese Bank Account)
- If the withdrawal amount is less than 50,000 yen: 250 yen per transaction
- If the withdrawal amount is 50,000 yen or more: Free
- Minimum withdrawal amount: 251 yen
Currency Conversion Fee (When Transacting Between Different Currencies)
- When borne by the sender: 4.00%
- When borne by the recipient: 3.00%
How to Add PayPal to Your Shopify Store
To use PayPal payments on your Shopify store, follow these steps to set it up.
Step 1: Create a PayPal Business Account
To use PayPal on Shopify, you need a PayPal "Business account."
To Create a New Account
Go to the official PayPal website, select "Sign up for free," choose "Business account" as the account type, and follow the on-screen instructions to complete registration.
#### To Switch from a Personal Account
Log in to your existing PayPal personal account, select "Upgrade to a Business account" from the settings screen, and enter the required information.
Step 2: Complete Identity Verification
After logging in to your PayPal account, complete identity verification. Upload the required documents or present them online.
The required documents differ slightly between sole proprietors and corporations. For corporations, verification documents for the corporation are required in addition to the representative's personal verification documents.
Step 3: Register a Bank Account
Register a bank account to receive your sales proceeds through your PayPal account.
(1) Log in to PayPal and click "Get paid and receive payments" > "Bank & cards" from the top menu.
(2) Click "Link a bank account."
(3) Add the account information following the on-screen instructions.
Step 4: Add PayPal to Shopify Payment Methods
Configure PayPal payments in your Shopify admin.
(1) From the Shopify admin, go to "Settings" > "Payments."
(2) In the "Supported payment methods" section (or "Alternative payment methods"), look for "PayPal."
(3) Click "Activate PayPal" and connect it to your PayPal Business account.
(4) Following the on-screen instructions, enter or confirm your PayPal account information (such as your email address) to complete the setup.
(5) After completing the PayPal integration, click "Return to Shopify."
(6) Setup is complete once PayPal appears in the payment method list and shows as "Active."
A Shopify App That Can Hide PayPal Under Specific Conditions
RuffRuff Order Limits
"RuffRuff Order Limits" fully supports Japanese and is Japan's first Shopify app to use the Cart and Checkout Validation API.
By using the "Cart and Checkout Validation API," it achieves order-restriction processing on the server side — something previously only possible on the front end. As a result, it can implement order restrictions that are much more robust and harder to bypass compared to existing order-restriction apps.
With this single app, you can implement quantity limits, amount limits, product-combination restrictions, customer restrictions, and payment-method hiding.
Using this app, you can achieve things such as the following:
・Hide LINE Pay once the cart total reaches 3,000 yen or more
・Hide LINE Pay if the cart contains a digital product
・Hide LINE Pay for guest members only
The blog article below introduces how to use RuffRuff Order Limits to hide PayPal on the checkout page when the cart contains a product from a specific collection. Please use it as a reference.
Conclusion
This article explained everything from the benefits and setup steps to the points to note when adding PayPal payments to your Shopify store.
Adding PayPal can increase customers' sense of ease by letting them choose a payment method they're already used to, potentially leading to improved cart abandonment rates and increased sales. PayPal is a strong option especially if you handle products that can't be processed through Shopify Payments, or if you want to offer a wider range of payment methods.
Another major benefit, especially for small businesses, is that you can get started with no setup fee or fixed monthly cost — only the payment processing fee applies. That said, it's important to thoroughly confirm the transaction fees, terms of service, and especially prohibited products in advance.
Adding PayPal payments to your Shopify store operations can be one way to help boost customer satisfaction and drive business growth. We hope this article helps as you consider it.
