Last updated: November 2024

Shopify's Basic plan advertises 2% + £0.25 per transaction, but the effective fee per order varies by order value, card type, and payment method. Here's how the fees actually work — and where they can be reduced.

The advertised rate and the effective rate are two different numbers

Shopify's Basic plan advertises a payment processing fee of 2% plus £0.25 per transaction. For most merchants looking at this before they've had time to study a few months of payouts, this sounds like a straightforward cost. It's not quite that simple.

The 2% plus £0.25 is the base rate for UK domestic card transactions through Shopify Payments on the Basic plan. The effective fee — what you're actually paying as a percentage of order value — can be meaningfully higher depending on the mix of order values going through your store, the types of cards your customers use, and whether any of your payment volume goes through third-party gateways.

Understanding how these factors combine is genuinely useful for managing margins, particularly as order volume grows and small differences in effective fee rates compound into meaningful costs.

Quick summary

• The Shopify Basic plan charges 2% plus £0.25 per transaction through Shopify Payments for standard UK cards — but the effective percentage of order value varies significantly based on order size

• The £0.25 flat fee component has a disproportionate impact on lower-value orders: on a £10 order it represents 2.5% of order value before the percentage component is added, on a £100 order it's only 0.25%

• American Express and international card transactions typically carry higher processing rates than standard Visa and Mastercard domestic cards

• Any payment volume going through third-party gateways — including PayPal, Klarna, and any other non-Shopify Payments provider — also triggers a Shopify gateway surcharge of 2% on the Basic plan, in addition to the gateway's own fees

• Pay by Bank via Fena typically processes at a lower effective rate than Shopify Payments for eligible merchants, with no gateway surcharge and no chargebacks

• For merchants with a mix of order values, card types, and payment methods, the blended effective fee rate is almost always higher than the headline 2% figure

How Shopify Basic plan fees are calculated

The fee structure on the Basic plan has two components that apply to every transaction through Shopify Payments:

The percentage component:

2% of the order value. This scales linearly — a £200 order incurs £4.00 in percentage fees; a £50 order incurs £1.00.

The fixed component:

£0.25 per transaction, regardless of order value. This doesn't scale — it costs the same on a £10 order as on a £1,000 order.

It's the interaction between these two components that creates variation in the effective fee rate across different order values.

At £10:

percentage fee £0.20 + fixed fee £0.25 = total £0.45, effective rate 4.5%

At £25:

percentage fee £0.50 + fixed fee £0.25 = total £0.75, effective rate 3.0%

At £50:

percentage fee £1.00 + fixed fee £0.25 = total £1.25, effective rate 2.5%

At £100:

percentage fee £2.00 + fixed fee £0.25 = total £2.25, effective rate 2.25%

At £250:

percentage fee £5.00 + fixed fee £0.25 = total £5.25, effective rate 2.1%

The pattern is clear: the lower the order value, the higher the effective fee rate — and the more significant the flat £0.25 becomes as a proportion of the total transaction cost. For stores with low average order values, the effective rate can be substantially higher than 2%.

Why your actual payouts may be lower than expected

Three factors commonly push effective fees above the base calculation:

Card type variations.

Not all cards cost the same to process. Shopify Payments passes through different rates for different card types. American Express typically carries a higher processing fee than Visa or Mastercard consumer debit cards — rates can reach 2.9% plus £0.25 for Amex and similar premium cards, compared to lower rates for standard UK debit. If a meaningful proportion of your customers pay with Amex or premium credit cards, your effective blended rate will be higher than the standard 2% figure.

International cards — cards issued outside the UK — similarly carry higher rates due to additional interchange fees. Shopify Payments' rate for non-UK cards can reach 2.9% plus £0.25 or higher for some card types. Merchants with significant international customer bases need to account for this in their effective fee calculations.

Third-party gateway surcharges.

If any of your checkout payment methods go through third-party providers rather than Shopify Payments, Shopify applies an additional transaction fee on the Basic plan of 2%. This fee is charged on top of whatever the gateway itself charges.

PayPal, Klarna, and any other non-Shopify Payments option trigger this surcharge. A merchant on the Basic plan using PayPal for a significant portion of orders is paying PayPal's own fee (approximately 3.4% plus £0.20 at standard rates) plus the 2% Shopify surcharge — a combined effective rate of over 5% on those transactions.

Refunds and chargebacks.

The processing fee paid on a transaction is typically not returned when an order is refunded. A refunded £100 order still cost approximately £2.25 in processing fees. Over time, for stores with meaningful return rates, this refund fee leakage adds to the effective cost of sales. Chargebacks add further — a £10 dispute fee per chargeback regardless of outcome, plus any associated transaction losses.

The effective fee rate by order value range

Working through the arithmetic across different order value ranges makes the variation concrete:

Orders under £20:

The £0.25 flat fee represents more than 1.25% of order value before the percentage component is added. Effective rates of 3.5–5% are typical for this range, rising higher on very small transactions.

Orders of £20–£50:

The flat fee becomes less dominant but still meaningful. Effective rates of 2.5–3.5% are typical depending on card type and exact order value.

Orders of £50–£100:

Effective rates of 2.2–2.75% are typical for standard UK card transactions.

Orders over £100:

The flat fee's proportional impact becomes minimal. Effective rates converge toward 2–2.25% for standard cards. Premium card types still push this higher.

The implication for merchants is straightforward: the lower your average order value, the further your effective fee rate sits above the headline 2% figure.

Where Pay by Bank reduces the effective rate

Pay by Bank via Fena typically processes at a lower effective rate than Shopify Payments for eligible UK merchants, for several reasons:

Lower processing fee.

The processing fee for Pay by Bank via Fena is typically 0.5–1% per transaction, compared to 2% plus £0.25 for Shopify Payments on the Basic plan. At a £50 order, this is approximately £0.50–£0.75 versus £1.25 — a saving of approximately £0.50–£0.75 per transaction.

No Shopify gateway surcharge (for eligible merchants).

For merchants where Fena's integration structure avoids the Shopify third-party gateway surcharge, the effective cost is the Fena processing fee alone, with no additional Shopify deduction.

No chargebacks.

Pay by Bank transactions don't go through card networks, so there are no chargeback fees and no dispute ratio implications. For merchants where chargebacks are a recurring cost, removing this on Pay by Bank volume has a direct effect on the effective cost of sales.

Same-day settlement.

Shopify Payments takes 3–5 business days to pay out. Pay by Bank via Fena settles same-day. The working capital value of faster settlement is real for merchants managing cash flow against payables.

Adding Pay by Bank alongside Shopify Payments doesn't replace the card payment option — it gives customers an additional payment route that typically costs less per transaction to process. As more customers choose Pay by Bank, the blended effective fee rate across all payment methods decreases.

Practical actions for managing Shopify Basic plan fees

Calculate your actual blended effective fee rate.

Take your total payment fees for a recent month — processing fees from Shopify's payout summaries plus any chargeback costs — and divide by total revenue. If this number is significantly above 2.5%, there are likely specific payment methods or order value ranges where the rate is elevated.

Review your payment method mix.

Understand what proportion of orders go through each payment method. If a significant proportion goes through PayPal or other third-party gateways, the surcharge cost may justify reassessing the payment mix.

Add Pay by Bank via Fena.

For UK-based customers, Pay by Bank provides a lower-cost payment route. The implementation is straightforward for Shopify merchants and doesn't require removing existing payment methods.

Consider plan upgrade if volume justifies it.

Higher Shopify plans offer lower processing rates — 1.6% plus £0.25 on the Shopify plan, 1.5% plus £0.25 on Advanced — and lower gateway surcharges (1% and 0.5% respectively). At sufficient transaction volume, the monthly plan cost increase is outweighed by the fee reduction. Calculate this based on your actual volume before deciding.

Frequently asked questions

What are Shopify Basic plan fees for UK merchants?

The base rate through Shopify Payments is 2% of the order value plus £0.25 per transaction. The effective fee as a percentage of order value varies — it's higher on lower-value orders because the £0.25 flat fee represents a larger proportion of the total. On orders under £20, effective rates of 3.5–5% are typical.

Why is my effective Shopify fee higher than 2%?

Three main factors: the flat £0.25 component has a larger proportional impact on smaller orders; American Express and international cards carry higher processing rates than standard UK debit cards; and any payment volume through third-party gateways triggers an additional 2% Shopify surcharge on the Basic plan.

How does the Shopify third-party gateway surcharge work?

If you use any payment method other than Shopify Payments — including PayPal, Klarna, or any other external gateway — Shopify applies an additional 2% fee on the Basic plan (1% on Shopify, 0.5% on Advanced). This is charged on top of whatever the gateway itself charges.

Does Pay by Bank have a lower effective fee than Shopify Payments?

For eligible UK merchants, yes. Pay by Bank via Fena typically processes at 0.5–1%, without the Shopify gateway surcharge, and without chargebacks. On equivalent transaction values, the effective fee is lower than Shopify Payments for standard card transactions and substantially lower than third-party gateways like PayPal.

When should I upgrade from the Shopify Basic plan to reduce fees?

When the monthly fee saving from the lower processing rate and gateway surcharge on higher plans exceeds the additional monthly plan cost. For merchants processing primarily through Shopify Payments, the Shopify plan (approximately £65/month more than Basic) starts to pay for itself on processing savings when monthly card volume exceeds approximately £65,000. For merchants with significant third-party gateway volume, the surcharge saving may justify upgrading at lower volume levels.

Do Shopify fees apply to refunded orders?

The processing fee on a transaction is typically not returned when the order is refunded. A refunded £100 order still incurs the £2.25 processing fee. For stores with meaningful return rates, this fee leakage adds to the effective cost of sales over time.