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Why Should Some UK Merchants Look at Alternate Payment Providers over Shopify Payment or Shop Pay?

February 2026
10 min read
Why Should Some UK Merchants Look at Alternate Payment Providers over Shopify Payment or Shop Pay?

Shopify has become one of the leading e-commerce platforms in the UK, powering hundreds of thousands of online stores. As of early 2026, estimates place the number of Shopify stores in the United Kingdom at around 190,000 - 245,000 (depending on the source, such as BuiltWith, Store Leads, or DemandSage data), making it the second-largest market after the US.

While Shopify Payments (the platform's built-in gateway, which powers the accelerated Shop Pay checkout) is widely adopted globally - reaching roughly 90% of eligible merchants in supported regions - many UK merchants still opt out or never activate it. This leaves a significant portion relying entirely on third-party payment gateways like Stripe, PayPal, Adyen, or Boodil.

In this post, we'll explore who these merchants are, why they choose to skip Shopify Payments / Shop Pay, the popular alternatives they turn to, and what it means for UK e-commerce in 2026.

Why Many UK Shopify Merchants Avoid Shopify Payments and Shop Pay

Shopify Payments launched in the UK years ago and offers seamless integration, no extra transaction fees (beyond standard processing rates of around 2.4% - 2.9% + fixed fee depending on your plan), and access to Shop Pay's one-click checkout (which boosts conversions for many stores). Despite these advantages, adoption isn't universal.

Common reasons UK merchants stick with or switch to third-party options include:

  • Lower effective fees or better rates for specific volumes/business types - Some merchants negotiate sharper rates with providers like Boodil or Adyen, especially for high-volume or international sales. Others avoid perceived "hidden" costs, such as currency conversion markups (around 2% for cross-border) or payout delays.
  • Need for specific/local payment methods - UK shoppers love options like bank transfers (pay by bank), direct debits, or local BNPL (Buy Now, Pay Later) services. Third-party gateways often provide broader or more tailored support for these.
  • Business model or product restrictions - Certain industries (e.g., high-risk categories like supplements, CBD/vapes, adult products, or regulated items) face stricter scrutiny or outright prohibitions under Shopify Payments' terms. These merchants must use alternatives to avoid account holds, frozen funds, or deactivation.
  • Existing relationships or legacy setups - Many established brands already have contracts with Stripe, PayPal, or traditional UK acquirers and see no urgent reason to migrate.
  • More customization or features - Advanced needs like complex subscriptions, multi-currency handling without extra fees, fraud tools, or split payments drive merchants toward specialized providers.
  • Avoiding extra Shopify transaction fees on third-party gateways - If you don't use Shopify Payments, Shopify adds a surcharge (2% on Basic, 1% on Shopify plan, 0.5% on Advanced). Some merchants calculate that even with this, a cheaper alternative nets out better - or they accept it for other benefits.

While exact UK-specific percentages aren't publicly broken out in detail, global trends suggest 10 - 20%+ of eligible merchants (and more in restricted/high-risk niches) continue without Shopify Payments. In practice, third-party gateways remain very common in the UK ecosystem.

Popular Alternatives UK Shopify Merchants Use Instead

Shopify supports over 75 payment providers in the UK, but a handful dominate among those bypassing Shopify Payments:

  • Stripe - The go-to for many. Excellent for subscriptions, developer-friendly APIs, strong fraud tools, and competitive rates (around 1.5% + 20p for UK cards in some setups). Widely used for its flexibility and global reach.
  • PayPal - Still hugely trusted by UK consumers. Easy setup, buyer protection appeal, and support for PayPal Express/Checkout. Often combined with other methods.
  • Adyen - Favored by larger/international brands for unified global processing, low fees on volume, and extensive local payment support.
  • Boodil (Cashflows) - A long-time UK favorite for reliability, low monthly fee models, good risk appetite and strong domestic card support.
  • Others - Worldpay, Klarna/Clearpay (for BNPL), Amazon Pay, and emerging options like Airwallex for cross-border savings.

Many merchants run a mix: e.g., Boodil as primary + PayPal + a BNPL provider to maximize checkout options and conversions.

What This Means for UK Shopify Merchants in 2026

The choice to skip Shopify Payments isn't always about "avoiding" it - it's often strategic. For smaller or straightforward stores, Shopify Payments + Shop Pay delivers simplicity, faster payouts, and higher conversions out of the box. But for scaled businesses, niche verticals, or cost-optimized operations, third-party gateways provide the edge.

If you're a UK Shopify merchant evaluating options:

  • Calculate your true effective rate (including any Shopify surcharges, FX fees, chargebacks, etc.).
  • Consider your product vertical and risk profile.
  • Test checkout conversion with/without Shop Pay.
  • Explore hybrids - many use Shopify Payments for domestic cards but route international/high-risk via alternatives.

The UK e-commerce landscape continues evolving, with more emphasis on diverse payment methods, lower fees, and compliance (PSD2/SCA, GDPR). Whether you embrace Shop Pay or build a custom stack, the goal remains the same: frictionless payments that convert visitors into loyal customers.

What payment setup are you running on your Shopify store? If you need assistance, Shopify is where we excel, so get in touch.