When you’re building an online store with Shopify, one of the first decisions you’ll face is choosing how you’ll handle payments. After all, if your customers can’t pay easily, you’re not going to make many sales. Shopify offers a variety of payment options, each with its own set of advantages and potential drawbacks. In this guide, we’ll break down everything you need to know about Shopify’s payment solutions to help you make the best choice for your business.
Shopify Payments: The All-in-One Solution
If you’re looking for an easy and integrated solution, Shopify Payments is the way to go. Shopify Payments is Shopify’s own payment processor. It’s built into the platform, which means you don’t have to set up a third-party gateway. This is one of the simplest and most streamlined ways to accept payments on your Shopify store.
Here’s why Shopify Payments is often the preferred option:
- Seamless integration: Because it’s built into Shopify, everything is set up for you. There’s no need to worry about connecting to an external payment gateway.
- Lower transaction fees: Shopify Payments offers lower transaction fees than using third-party providers like PayPal or Stripe. For instance, Shopify only charges a 2.9% + 30¢ fee for credit card payments. If you’re using a third-party gateway, you’ll likely pay extra fees.
- Wide range of accepted methods: Shopify Payments allows you to accept payments via credit and debit cards (Visa, MasterCard, AMEX), Apple Pay, Google Pay, and even Shopify Pay. Shopify Pay makes it easier for customers to checkout quickly using saved information from previous purchases.
However, Shopify Payments is not available everywhere. As of now, it’s available in over 17 countries, including the U.S., Canada, the UK, and Australia. If you’re in a country where Shopify Payments isn’t supported, you’ll need to consider a third-party gateway.
Third-Party Payment Gateways
For store owners located outside the countries where Shopify Payments is available, third-party payment gateways are an essential part of the equation. Shopify supports a long list of third-party payment providers. These gateways allow you to accept payments securely, though they may come with additional fees and setup steps.
Some of the most popular third-party payment gateways supported by Shopify include:
- PayPal: One of the most widely used online payment systems, PayPal is quick and easy to set up. It also offers buyer protection, which can help build trust with customers. However, PayPal’s transaction fees can add up, especially for international sales.
- Stripe: Stripe is known for being developer-friendly, and it supports a wide variety of payment options, including Apple Pay, Google Pay, and more. Like PayPal, Stripe’s fees can be higher than Shopify Payments, but it’s a solid choice for customizable payment processing.
- Authorize.Net: This is a reliable payment processor often used by larger businesses. It supports all major credit cards and offers advanced security features. However, it can be a bit more complicated to set up than PayPal or Stripe.
When using third-party gateways, you’ll want to pay attention to any extra fees they might charge. Shopify typically charges an additional 2% fee on top of the transaction fees from third-party processors (unless you’re using Shopify Payments).
Shopify’s Payment Fee Structure
Understanding Shopify’s fee structure is crucial for pricing your products correctly. Shopify’s pricing can vary based on the payment provider you choose and your store’s plan. Let’s take a look at how this works:
- Shopify Payments: If you use Shopify Payments, you won’t incur any extra fees from Shopify, but you’ll still pay the transaction fees based on your plan:
- Basic Plan: 2.9% + 30¢ per transaction
- Shopify Plan: 2.6% + 30¢ per transaction
- Advanced Plan: 2.4% + 30¢ per transaction
- Third-Party Gateways: When you choose a third-party provider, Shopify adds an additional 2% fee (on the Basic and Shopify plans), so make sure to factor in that extra cost when setting prices. However, if you’re on the Advanced Shopify plan, this fee drops to 0.5%.
While Shopify Payments provides an overall cheaper solution, it’s important to consider your location and the methods your customers prefer to use.
Multiple Currencies and Global Payment Processing
Another important consideration when choosing a payment method is multi-currency support. If you plan to sell internationally, you’ll need a payment processor that can handle multiple currencies. Shopify Payments supports multi-currency for stores that use Shopify Payments and are on the Shopify Payments list of supported countries. This means you can display prices in your customers’ local currency, making their shopping experience smoother.
For third-party gateways, you’ll want to check if they support multi-currency. Some, like PayPal, offer multi-currency support, but others may not. Depending on your market, this could be a dealbreaker for your business.
Payment Security and Fraud Prevention
Security is a top priority for online merchants. After all, the last thing you want is for your customers to feel like their information isn’t safe. Shopify Payments includes built-in security features like PCI compliance and SSL certificates, which means your transactions are secure and your customers’ data is protected.
On the other hand, with third-party payment processors, the level of security can vary. PayPal, for instance, has strong fraud protection policies, while others may not offer as much built-in protection. It’s always wise to research the security features of any third-party provider before making your choice.
Integrating Shopify Payments with Your Marketing and Customer Experience
Once you’ve set up your payment processing system, it’s time to integrate it with your marketing efforts. Offering a smooth payment experience can significantly boost your conversion rates. Here are a few tips for making your payment process as frictionless as possible:
- Shopify Pay: Encourage customers to use Shopify Pay for faster checkouts. Shopify Pay allows returning customers to save their payment and shipping details for one-click purchases, speeding up the process.
- Payment Methods: Offer multiple payment options like PayPal, Apple Pay, and credit cards to accommodate different preferences.
- Mobile Optimization: Make sure your store is mobile-friendly. More customers are shopping from their phones, so it’s essential that your payment system works seamlessly across all devices.
- Security Badges: Display security badges (like SSL or PCI compliant logos) on your checkout pages to build trust and show that you prioritize customer safety.
Shopify Payment Options and Your Business Growth
Choosing the right payment solution is about more than just the transaction fees. It’s about finding a system that fits your business model, your customer base, and your growth plans. Whether you opt for Shopify Payments or a third-party gateway, the right solution can help you streamline your operations and improve customer satisfaction.
One last tip: keep an eye on emerging payment trends. Cryptocurrencies, for instance, are gaining popularity in some sectors. If you think your customers might be interested in using digital currencies, you can integrate a cryptocurrency payment processor into your Shopify store.
In conclusion, Shopify gives you a wide range of options for accepting payments. Shopify Payments is the easiest and most affordable solution for many merchants, but if you’re outside its supported countries or need additional features, third-party gateways are a viable option. By understanding the pros and cons of each option, you’ll be able to make an informed decision that best supports your business and keeps your customers happy.