Shopify transaction fees – when to upgrade to decrease the fee

Shopify’s 3 most popular plans (“Basic”, “Shopify” and “Advanced”) come with slightly different features and the more expensive the plan is the more features it has.

One “feature” that all those 3 plans have is a transaction fee. A fee that Shopify charges when customers pay by using a third party payment provider. The fee is 2.0% for the $29/month Basic plan, 1.0% for the $79/month “Shopify” plan and 0.5% for the $299/month Advanced plan.

If you are accepting lot of payments via third party payment providers and using one of these monthly plans there might actually be a time when it is a good idea to upgrade your plan to simply decrease the transaction fee %.

We have created the table below to illustrate how much you have to generate in monthly payments via third party payment gateways to justify upgrading to a more expensive plan. The table is relevant as of 24.12.2020, if Shopify changes their plan prices or makes change to the fee structure the thresholds change.

Current planWhen to upgrade to “Shopify”When to upgrade to Advanced
Basic$5,000+ in monthly transactions$18,000+ in monthly transactions
ShopifyN/A$44,000+ in monthly transactions

You can use the above table also if you are considering downgrading your service: e.g if you are thinking about downgrading from Advanced to “Shopify”-plan your monthly transaction volume should be below $44,000 for that to make sense. 

Notes: The above table is based on a few assumptions. 1) there is no monetary value on the other features that you get by upgrading or lose by downgrading (in most cases not true). 2) you are using a monthly subscription plan. That is relevant because Shopify offers 10% discounts for yearly plans and 20% discounts for 2 year plans. 3) it naturally only makes sense to upgrade if you expect transaction volume to continue being at least as high as it currently is. In other words, don’t change just because, for an example, December was a month during which it would have made sense to be on other plan.

Good to note: The threshold at which it makes sense to upgrade from “Basic” to “Shopify” is quite low when compared to the threshold at which it makes sense to upgrade from the “Shopify”-plan to the “Advanced”-plan.

Are there ecommerce platforms that do not charge additional transaction fees? Yes. And if you are looking for one, Zyro might be a good choice.