What are shopify payments, and how do they work?
Shopify’s most popular payment gateway is Shopify Payments. When it comes to shopify payments, there are a number of things to consider.
In this blog post, we’ll look at how shopify payments works, cost savings, and more.
Move over PayPal. Stripe and Square—you two as well.
Shopify Payments is currently the most popular payment gateway for Shopify merchants. This one-stop payments solution is quick, compliant with Payment Card Industry (PCI) standards, and offers 3D secure checkout. It’s no surprise that it has over 1,700,000 customers worldwide.
Shopify has long had one major drawback: credit card payments. Users of Shopify had to use a third-party payment solution to take credit card payments. In addition, Shopify imposed an additional charge for the service.
That one huge void has been filled by Shopify Payments. It’s also made it easier, cheaper, more convenient, and safe.
What are Shopify Payments?
Shopify Payments is Shopify’s own payment service that handles all of the stages in an online transaction, as well as issuing receipts.
It’s ideal for small businesses since it serves as the default payment gateway, removing the need for third-party payment services.
The payment page, once set up, allows you to accept payments through a variety of popular payment options. Credit cards, debit cards, gift cards, Apple Pay, Amazon Pay, and even cryptocurrency are all supported.
US businesses can accept these credit and debit cards through Shopify Payments:
- American Express
- Diners Club
Shopify pricing plans
Shopify currently offers these four plans:
- The cheapest Shopify plan, which is known as Shopify Basic, costs $29 per month. The net credit card transaction fees are 2.9 percent plus 30 cents for each transaction.
- The Standard plan from Shopify costs $79 per month. The 2.6 percent online credit card transaction fee applies to each purchase, while the cost of each transaction is 30¢.
- Shopify’s Advanced plan is priced at $299 per month, with online credit card transaction rates of 2.4 percent and 30¢ for each transaction.
- Shopify’s premium plan, Shopify Plus, costs $2000 per month. This plan has a monthly fee of $2000 and 2.15 percent transaction fees for online and credit card purchases.
In addition to these pricing plans, Shopify also has a Shopify Lite plan which is priced at $9 per month. This plan allows merchants to add “Buy Buttons” and start selling through their existing social media channels or website.
Requirements for using Shopify Payments
Shopify Payments is presently available in 17 countries. The United Kingdom, Australia, New Zealand, and Sweden are among the supported nations. At present, this service is only accessible in Puerto Rico in the United States.
It’s good to know that it is not allowed for transactions including investment services, debt reduction, or legal firms. This service is also prohibited for retailers involved in gambling, the sale of e-cigarettes, weapons, and explosives.
Shopify Payments can be used with any bank account that meets the following requirements:
- Your bank account must be a full checking account. it can link to a variety of different financial institutions, including current accounts and business bank accounts.
- Your bank account must use the same currency as your country and region.
- Your bank account should accept electronic money transfers.
Your bank must also fulfill certain regional requirements in addition to the ones listed above. It is critical that your bank account is with a physical US bank for US-based firms. The account should be able to receive USD as currency and participate in Automated Clearing House (ACH) transfers.
Shopify Payments does not support personal or business accounts created with various third-party services that provide similar features to a bank account, such as personal or company savings accounts, flex-currency accounts, checking accounts that only accept wire transfers, and it can mimic a bank account.
These charges are associated with Shopify Payments for processing payments:
Processing fee for credit card payments
The fee you pay Shopify Payments to complete the different stages of a payment transaction is called an interchange. These include data transmissions between the buyer, seller, issuing, and acquiring banks. The cost of credit card processing is determined by your Shopify plan, the amount purchased, and the number of sales made.
This is the charge you pay Shopify for monetary transactions in your store. You are not required to pay this fee after you’ve enabled Shopify Payments. Even if a client wants to use another payment method then you can use it at checkout.
How to set up Shopify Payments?
It’s straightforward. Set up this by going to Shopify Settings and choosing Payments Provider, as shown in the figure. Then, under Shopify Payments, choose Activate. You’ll be asked to provide your Employer Identification Number (EIN) and financial information. Businesses in certain countries may have to supply additional information for Shopify Payments account creation.
After you’ve filled out the required information, click Save.
Benefits of using Shopify Payments
Shopify Payments uses Stripe’s technology, which is faster, more user-friendly, and easier to use than Stripe. it is completely integrated into your store’s dashboard. There is no need for merchant account approval.
This connects your Shopify store to your bank accounts, making it easier than ever to get paid. You can also connect this for a recurring monthly fee.
In addition, once you’ve set up Shopify Payments for your company, all of your financials are instantly synced with your inventory and sales.
Here are the most noteworthy benefits of switching to Shopify Payments:
1. Quick, complete integration
When making a purchase on your Shopify store, your customers don’t have to leave the site. Purchases made using a different payment method are redirected to a third-party platform. Customers who aren’t tech-savvy can find this inconvenient, time-consuming, and unsavory.
From your dashboard, you may keep track of your orders and finances using the payment back-office. It’s a straightforward and simple method to see how much money you’ve earned from each Shopify Payments transaction.
2. Savings on transaction fees
You’ll pay transaction costs if you use a third-party platform to accept payments. In the long run, these expenses might really add up. Shopify Payments eliminates the fee, resulting in significant cost savings.
3. Offline sales
Shopify Payments works with Shopify POS (Point of Sale). All of your purchase data, both online and offline, are brought together. This allows it to handle offline transactions—a feature that isn’t available in popular third-party platforms like PayPal.
4. Flexible payment methods
Customers may still choose any other popular payment method, such as Authorize.net, PayPal, or Amazon Pay after you have activated Shopify Payments.
This adaptability ensures that customers who prefer a certain payment processor can still make a purchase at your business if you use it.
5. Fraud analysis
Shopify Payments’ advanced fraud analysis tools help you find fraudulent transactions. Shopify Payments has two distinct filters for detecting fraud.
Address Verification System (AVS)
The AVS filter compares the customer’s address information to that of the credit card issuer’s database. It confirms that the zip/postal code or billing addresses are correct.
In most situations, customers using a credit card belonging to someone else are unaware of the address information. Shopify Payments detects suspicious orders and flags them as potential frauds.
Card Verification Value (CVV)
The CVV is a three or four-digit number printed on the back of a credit card. Customers’ CVV information isn’t kept by any firm. It’s difficult to imagine that someone who has stolen credit card data from a merchant’s database can provide the correct CVV.
This requires a CVV for online payment processing. This helps to prevent card fraud and ensures that you only process orders that are authorized. This is an excellent alternative due to its enhanced transparency, faster transactions, and lower processing rate than its competitors.
Note: Before you switch to this, be sure to read the terms of service.
FAQ about Shopify Payments
What is Shopify payment?
You can accept payment from a variety of options, including credit cards, debit cards, gift cards, Apple Pay, Amazon Pay, and even cryptocurrency with Shopify Payments.
Are Shopify Payments good?
The finest and simplest means to take payments online is Shopify Payments. From installation to selling in one click, avoid time-consuming third-party activations. It is included with your account; all you have to do now is turn it on.
How do I accept Payments on Shopify?
- From the Cart screen, tap Checkout.
- Tap the Enter credit card details amount field.
- Enter the credit card details.
- Tap Charge to process the payment.
- Optional: Tap Print receipt.
- Tap Done to return to the Shopify POS products screen.
What is the best payment method for Shopify?
Shopify Payments is without a doubt the best option. Shopify Payment is owned by Shopify and is already included in your store when you create an account. Payments can take up to three business days to arrive in your bank account. You may also get a free card reader for use in your physical location of business.
What countries can use Shopify payments?
Shopify Payment is currently available in the following countries:
- Hong Kong SAR
- New Zealand
- United Kingdom
- The United States Shopify Payments is not available to US territories except Puerto Rico.
What to Do Next?
The development of a successful Shopify store takes time; it’s a lot of trial and error. You may keep your consumers on your site without being redirected to different sites by using the appropriate third-party applications. Concentrate on developing a user-friendly online shop that provides exceptional customer service.
Always aim to make shopping as simple as possible.
Customers want to know all they need to know about your product so they can make an informed decision. Use Shopify Payments to retain client loyalty and give your clients the thorough product information they require to confidently buy.