When you start to sell on Shopify, you’ll soon need to set up a way to collect payments. If you’re new to e-commerce and are looking for your first sale on Shopify, you’ll have noticed that the platform supports a lot of payment providers, including their own – Shopify Payments. This in-depth guide will answer all your burning questions about Shopify Payments, including:
- What is Shopify Payments
- How do Shopify Payments work?
- What is the fee for Shopify Payments?
- Who can use Shopify Payments?
- What are the pros and cons of using Shopify Payments?
… to name just a few. By the end of this guide, we hope you’ll be in a great position to decide whether or not Shopify Payments is the right payment service for you and your Shopify store.
What is Shopify Payments?
Shopify Payments is an integrated payment service that allows you to accept payments almost immediately after signing up for a Shopify store. By using it, you can accept different types of payment methods, including most of the major credit cards and Apple Pay. Once the customer adds their credit card information when making a purchase, it is the responsibility of Shopify Payments to manage everything until the payment is made into your bank account. Lots of Shopify merchants use Shopify Payments as it’s really easy to configure with Shopify stores and Shopify doesn’t charge you extra fees – unlike if you were to use another payment provider on Shopify.
After integrating with a number of third-party payment gateways, Shopify eventually started to offer its own payment solution. The company partnered with Stripe and, thanks to a bit of rebranding, Shopify Payments has settled into its role as the primary payment provider for Shopify merchants.
How does Shopify Payments work?
Think of Shopify Payments as a ‘middleman’ between sellers and buyers. Whenever a
customer places an order in your Shopify store, Shopify Payments will collect their money and send it directly to store owners. As Shopify Payments is fully integrated with your Shopify store, usually the checkout is quick and easy. Shopify Payments is very secure, as it comes with fraud analysis - as a customer’s payment is being processed, Shopify Payments will automatically run an analysis to detect any suspicious activities. This will help to protect you from fake or scam orders.
Once payments have passed the fraud check, Shopify Payments will deposit the payments into the seller’s bank account within a few days, depending on the country you operate from. In the US it takes two business days, while in the UK it takes around three. If you’re wondering how long it takes Shopify Payments to pay in your country, take a look at this full country list.
How much does Shopify Payments cost? Are there any additional fees?
To use Shopify Payments, you must have a store registered on Shopify itself. Therefore, you will have to pay for one of the platform’s store plans:
Accepting payments in Shopify involves two types of fees: credit card processing fees and transaction fees. While Shopify doesn’t charge any extra transaction fees when you use Shopify Payments, you will still need to pay the ‘standard’ credit card processing fees that all processors charge. It is also worth noting that if you sell your products in multiple currencies, you will be charged the regular Shopify Payments processing fee and a currency conversion fee.
Also, while Shopify doesn’t charge anything for refunds, you don’t get your credit card transaction fees back when this happens.
Who can use Shopify Payments?
Shopify Payments is restricted to companies in a relatively short list of countries, which are:
- Australia 🇦🇺
- Austria 🇦🇹
- Belgium 🇧🇪
- Canada 🇨🇦
- Denmark 🇩🇰
- Germany 🇩🇪
- Hong Kong SAR 🇭🇰
- Ireland 🇮🇪
- Italy 🇮🇹
- Japan 🇯🇵
- Netherlands 🇳🇱
- New Zealand 🇳🇿
- Singapore 🇸🇬
- Spain 🇪🇸
- Sweden 🇸🇪
- United Kingdom 🇬🇧
- United States – Shopify Payments is not available to US territories except Puerto Rico 🇵🇷
If you’re not in one of the countries listed, you will have to opt for another payment provider supported by Shopify (and there are loads, so don’t worry too much, you can still grow your business through Shopify!)
You also cannot use Shopify Payments if your business falls in a category that’s prohibited by Shopify, so it’s always worth checking the list for your specific country before trying to integrate Shopify Payments with your store.
Shopify Payments vs. Stripe: Which one is better for your business?
Although Shopify Payments is a payment processor tailored for Shopify stores, it is not the only option for business owners on Shopify. Stripe is one of the top payment providers for online businesses and – despite Shopify Payments using its technology – it is a strong competitor to Shopify.
Shopify Payments vs. Stripe: At a glance
Shopify Payments vs. PayPal: Which one should you choose?
If you’re considering using a third-party payment provider on your Shopify store instead of Shopify Payments, you should consider that Shopify charges an extra transaction fee. This fee is on top of what you need to pay the service for processing the payments.
However, this fee only applies if you completely disable Shopify Payments. For example, if you offer Shopify Payments AND PayPal, Shopify wouldn’t charge you a transaction fee. But if you ONLY offer PayPal, you would be charged the transaction fee.
So let’s compare Shopify Payments and Paypal.
Can you have other payment options listed alongside Shopify Payments?
Absolutely! Shopify puts customers first, so it allows you to add other payment options to offer more variety, such as Amazon Pay. You can easily activate these options alongside Shopify Payments by navigating to your ‘Payments’ tab on your store dashboard, so multiple payment method buttons appear in the checkout. On that page, you will also see options for ‘alternative payment providers’, which allow you to add mobile payments and cryptocurrency, for example.
✅ The pros of using Shopify Payments
Shopify Payments is quick to set up
As Shopify Payments is fully integrated with your Shopify dashboard, it only takes a few minutes to install. Not having to use a third-party provider means not having to wait for approval for a merchant account before you can process payments. Once Shopify Payments is added to your store, you are ready to process sales – plus, your finances will be synced up with your sales and inventory.
Shopify Payments = No transaction fees
Shopify doesn’t charge any added transaction fees if you use Shopify Payments, unlike most other payment gateways, which will take a percentage of your revenue from each sale. So if your sales are increasing, your transaction costs will be climbing too.
Shopify Payments is fully integrated
We're big fans of making the purchasing process as easy as possible for buyers and Shopify Payments deliver on that. Your customers will stay on your website at all times because all transactions are on your Shopify store. This is not the case with the likes of PayPal or other third-party providers – buyers will be redirected to the platform to complete the purchase. This can have a negative impact on your conversion rate, as research shows that users prefer to complete transactions on the same site.
Shopify Payments gives buyers options
Choosing Shopify Payments does not mean you cannot use other payment providers. Adding more payment methods to your Shopify store means that customers will have more options at check out. This is good for both buyer and seller.
❌ The cons of using Shopify Payments
Not available in every country
As you’ve seen from the country list above, Shopify Payments is only supported in a relatively small number of countries. If you’re elsewhere, this is definitely a downside.
Must have a Shopify e-commerce platform
We’ve added this as a ‘con’ because we know some sellers are frustrated that they can’t use the payment provider on other platforms. However, as big fans of Shopify, we’ve got to ask – why haven’t you set up on Shopify yet?! 🤔
High chargeback fees
Chargeback is a return of money to a payer of an online credit card transaction. A chargeback means that you – the seller – have just lost an order and may incur an additional charge. This can be a concern if you are running a small online business. However, in our experience, Shopify Payments does its best to protect its merchants, so if you are issued a chargeback, Shopify will compile all the evidence and send it to the issuing bank on your behalf. Shopify’s got your back!
How to set up Shopify Payments in 7 easy steps
- Shopify Payments is so easy to set up that you are going to be up and running in no time at all!
- Click the Settings button on the lower-left hand side of your Shopify dashboard
- Choose Payments
- Choose Shopify Payments to start your account setup, or click on the Complete Account Setup button if you’ve already started the process
- Fill in all verification and personal information required, including business details, address and business type.
- Complete this page and finish by typing in the routing and account number from your bank account. Without this information, Shopify Payments cannot send you any payment, so don’t forget this stage!
- Click the Complete Account Setup button to finish the process.
And that’s it. All you need to do now is wait for Shopify to review your application and start the approval process for applicable local payment methods and credit card methods. Approval is usually done quickly, so you shouldn’t be waiting too long to get started.
How to decide if Shopify Payments is right for you – and your business
If your business ticks these three boxes, Shopify Payments is a great option for you:
✅ You already use, or plan to use, Shopify as an e-commerce platform
✅ Your business is in a supported region or country
✅ You don’t sell products or services on Shopify’s list of prohibited items and services.
Do you use Shopify Payments on your store? We’d love to hear about your experiences – Tweet us @SellWithAthlete.