November 15, 2019 12:00 PM PT

Shopify Payments


Shopify Payments is the payment processing gateway for Shopify subscribers. Is it safe? And will your business be able to accept PayPal? Read on for the pros and cons.

Paying for a POS and a third-party payment processor can squeeze your profits. If you have a Shopify store, you need an affordable payment processing option.

Shopify Payments offers that solution. Keep reading to see if it's right for your business.

What Is Shopify Payments?

Shopify Payments is the payment processing solution for Shopify subscribers. It allows you to accept credit card payments without integrating a third-party processing service.

If you already have a Shopify account, you can add Shopify Payments to your account with the following information:

  • Employer Identification Number
  • Average price of your orders
  • Average shipping time of your orders
  • Bank account information

You can be approved and start using Shopify Payments in just minutes. It integrates with your Shopify dashboard, allowing you to see all aspects of your eCommerce store in one place.

Is Shopify Payments Safe?
You can trust Shopify Payments to handle your business transactions. It's powered by Stripe, which handles PCI compliance for you. The platform also has a sound chargeback process—Shopify even has a tool to catch high-risk orders before they become a chargeback.

Finally, checkout is seamless. Customers don't leave your website and you don't have to integrate third-party tools, leaving less room for hackers and stolen information.

Shopify Payments Pros & Cons

Pros

  • No Additional Payment Processing Fees
    Shopify charges between 0.5% and 2% of each transaction if you use any other payment processor. With Shopify Payments, that fee is waived.

  • All-in-One Dashboard
    The Shopify Payments dashboard is directly connected to your Shopify account, allowing you to seamlessly sync information and perform multiple functions in one place.

  • Third-Party Payment Gateways
    Shopify Payments allows you to use multiple payment processors, which means you can accept PayPal. You'll pay an extra transaction fee, however.

  • Save Customer Information
    Customers can choose to store their payment and address information within Shopify Payments, increasing overall user experience and ease of use.

  • No Hidden Fees
    Shopify is transparent with their fees, including the extra transaction cost if you use a third-party processor.

Cons

  • Limited to Select Countries
    Currently, Shopify Payments is available in Australia, Canada, Denmark, Germany, Hong Kong, Ireland, Japan, the Netherlands, New Zealand, Singapore, Spain, United Kingdom, and the United States (including Puerto Rico).

  • Possible Account Issues
    Shopify Payments provides instant approval for an account. This can later lead to issues related to the Terms and Conditions, since there is a risk of frozen funds or closed accounts.

  • Potential 30-day Payout Period
    The normal payout period is two business days, but if you sell "risky products," your business may require a 30-day waiting period. If this applies to your business, Shopify will notify you directly.

You can learn about products and services that Shopify prohibits here.

Shopify Payments Fees

Shopify Payments, like many other payment processors, offers flat-rate pricing. The amount you pay per transaction depends on your Shopify plan:

  • Shopify Lite
    In-person payments 2.7% of each transaction, online payments 2.9% plus $0.30

  • Basic Shopify
    In-person payments 2.7% of each transaction, online payments 2.9% plus $0.30

  • Shopify
    In-person payments 2.5% of each transaction, online payments 2.6% plus $0.30

  • Advanced Shopify
    In-person payments 2.4% of each transaction, online payments 2.4% plus $0.30

Shopify Monthly Fees
The payment processing fees are in addition to Shopify's monthly fees, which range from $9–$299 per month.

Shopify Payments Equipment

Shopify offers two main card readers. You must have Shopify Payments enabled in your dashboard in order to use the equipment.

Chip & Swipe Reader

  • Regular price $29
  • Mobile card reader
  • Pairs wirelessly to your tablet or mobile phone
  • Compliant with Visa Ready
  • Protects credit card data per PCI DSS requirements

Shopify Tap & Chip Card Reader

  • Regular price $49
  • Accepts chip and contactless payments
  • Supports Visa, Mastercard, American Express, Discover, Apple Pay, Google Pay
  • EMV- and PCI-certified
  • Connects wirelessly to tablet or mobile phone

Shopify also offers an online hardware store to purchase additional payment equipment and accessories.

If your business requires equipment for receipt printing or barcode scanning, browse the Shopify hardware store here.

Shopify Payments and Multiple Currencies

Shopify Payments is currently available in the United States (including Puerto Rico), United Kingdom, Canada, Australia, Ireland, Hong Kong, Japan, New Zealand, and Singapore.

Businesses can choose which currencies they want to offer from their Shopify Payments settings. International customers can pay in their local currency and Shopify will automatically convert the prices using the foreign exchange rate. The customer also pays the conversion fee.

More info on Shopify Payments requirements for individual countries can be found here.

How It Compares

If Shopify Payments doesn't offer what your business needs, there are plenty of other payment processors on the market. Keep in mind that transaction fees will apply to any orders not processed with Shopify Payments, in addition to the processing fee charged by the processor of your choice.

  • Stripe
    Shopify Payments can integrate with Stripe, but you can also choose to use Stripe independently. Although the platform offers more customization options, you'll need a developer to program the features. Stripe pricing is similar and the restrictions are the same.

  • PayPal
    By choosing PayPal, customers will have to leave your website to finish their payment, increasing the risk of shopping cart abandonment. In addition, you'll pay the premium transaction fee for using a third-party processor, and PayPal charges fees for currency conversion.

  • Square
    With both Square and Shopify Payments, you share a merchant account with other businesses. However, Square's big advantage is that they offer a full-fledged POS with no monthly fees. You only pay flat-rate pricing for processing credit cards, which is similar to the fees charged by Shopify.

Bottom Line

If you already have a Shopify store, it's almost a no-brainer to incorporate Shopify Payments. Why pay the extra fee to use a third party that doesn't seamlessly integrate with Shopify?

If you use any other POS, though, Shopify Payments isn't available. You'll have to use one of the other reputable credit card processors available today.

More from CreditDonkey:


PayPal Credit Card Review: Worth It?


Stripe Review


Square Review

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