How do GoKwik, Razorpay Magic Checkout & Shopflo bypass Shopify’s 3P transaction fees?

Extensions
1

I’m trying to understand the technical/payment architecture behind some of the third-party checkout solutions in India.

For example, GoKwik, Razorpay Magic Checkout, Shopflo, etc. can act as the checkout/payment layer while Shopify is still used for the store, products, inventory and order management.

My question is:

How do these solutions avoid (or reduce) Shopify’s additional third-party transaction fees?

As I understand it, if you use an external payment provider instead of Shopify Payments, Shopify can charge an additional third-party transaction fee.

So how does the architecture work with these checkout providers?

Is it something like:

Shopify storefront → GoKwik/Razorpay/Shopflo checkout → payment gateway → create order in Shopify

And if so, why doesn’t Shopify apply the normal third-party transaction fee to that transaction?

Are these providers using Shopify’s Checkout Extensibility / payment app APIs / some specific Shopify partner arrangement, or is there another mechanism involved?

Would love to hear from anyone who has actually implemented one of these integrations and can explain what happens technically between checkout, payment authorization and Shopify order creation.

seems like they are breaking TOS but became billion dollar companies on that

3

Hey @tanmay_kejriwal, thanks for reaching out. I can’t speak to how specific providers are implemented or whether they have separate agreements with Shopify, so hopefully someone else is able to assist, but I still wanted to reach out to see if I can help a bit here.

Depending on the implementation, replacing Shopify Checkout or registering related transactions through the API without written authorization could conflict with the Shopify API License and Terms of Use as you mentioned.

If you believe a Partner may be violating those terms, the best place to report it is through the Report a Partner violation form. I can’t guarantee an outcome, but that’s the correct channel for review.