Shopify announced that they are launching “Shopify Payments” for U.S and Canadian based users (see the announcement here).
[UPDATE: Shopify Payments is now available to UK & Australian based merchants as well]
What does this mean to you?
Simplistically, Shopify Payments allow you to manage your payment gateway directly in Shopify’s user dashboard. This makes life easier for you for you in a few different ways (more on that below). A payment gateway is basically the institution that actually holds the money you receive when you make sales.
For example, these include PayPal, Stripe, Authorize.net, etc. You can see a full list of payment gateways that work with Shopify here.
Let’s move on to how this can benefit you and your business.
But quickly before we do, take a look at how we rate Shopify so you can really get a feel for it.
1) You Can Track Your Money in Real-Time
Sure, you can also track your sales dollars when you log into PayPal (for example, or whichever payment gateway you’re using). But then you will have to load up their website, sign in, click around to get to the right screens to get the right information. We do this all the time ourselves, so we know it takes time.
With Shopify Payments, all the money-related information you want is displayed directly in Shopify’s dashboard. This is very convenient especially when you manage your store on a daily basis, it’s nice to be able to see where your money is at in real-time with just a click.
You can see your payout schedule right away so you know when the money will be transferred into your bank. Just note when the money from your customers goes into Shopify Payments after you made a sale, it will be 3 days before the money is automatically transferred into your bank account (7 days for Canadian merchants). The short delay is there mainly to ensure that there are sufficient funds to cover any refunds or chargebacks (more on chargebacks below).
2) Shopify Transaction Fees Waived
So there might be some confusion here so I’ll clarify a few things for you.
If you are using the “Basic Shopify“, “Shopify” or “Advanced Shopify” plans, there are small transaction fees ranging from 0.5% to 2% per sale (more on this in our full Shopify review here).
If you decide to use Shopify Payments, these transaction fees will be completely waived, boosting your profit margins (more money in your pocket).
I think the reason for this is that Shopify is now earning payment gateway fees, instead of transaction fees. Payment gateway fees are fees that you have to pay anyway for payment processors to help you collect money from your sales – there isn’t a way around this as a merchant.
For instance, if you are using PayPal, they charge you anywhere from 1.9% to 2.9% plus $0.30 per transaction, depending on how much sales you make per month. Further, PayPal tends to have some hidden charges if you are transacting with a foreign country, so that adds up too if you sell internationally.
With Shopify Payments, the per payment gateway fee is very competitive across all payment gateways:
There are no other hidden charges (a lot of other payment gateways carry hidden charges), so Shopify is pretty transparent on this.
So broadly speaking, at the end of the day, there isn’t a significant difference between using Shopify Payments or other payment gateways. But the non-monetary benefit of using Shopify Payments is seamless integration (mentioned above), higher savings (waived transaction fees) and chargeback recovery (see below).
Shopify Plus – read our review of Shopify’s enterprise-level software to see if it’s right for your business.
3) Streamlined Chargeback Recovery Process
Chargebacks happen – they suck, we understand it as we’ve had those before too in our other businesses.
If you don’t know what a chargeback is, it’s when someone purchases a product from you, then files a complaint with their credit card company suggesting that they didn’t receive the product, never authorized the purchase, they got scammed, or whatever excuse they can come up with to cancel their transaction with you.
Like it or not, it’s just part of business. Like it or not, you’ll have to deal with it.
We use PayPal in another business and what we have to do is log into PayPal, click on the dispute resolution dashboard, then go through the process of providing additional proof relevant to the transaction. It’s definitely a time-suck when we’d rather be doing other things.
What Shopify Payments allow you to do, is deal with all this hassle directly in Shopify’s dashboard. Shopify will automatically provide responses that are custom generated from the order, shipping and customer details that you collected from the transaction. This will save you a lot of time, seriously.
Shopify Payments – Other Details
Here are a few things to note:
- If you use Shopify Payments as your primary payment gateway, you can still use PayPal as a backup just in case your customers prefer using PayPal. Giving your customers more payment options have proven to increase sales.
- Shopify Payments is currently only available to US, Canadian, UK and Australian Shopify users / merchants. Hopefully, the rest of the world soon after.
- Applying for other payment gateways can be a hassle. Not only do you have to provide a lot of information to them, sometimes it takes a long time (weeks) for them to approve. With Shopify Payments, you are instantly approved – so you can start selling right away.
Shopify Payments – Conclusion
The feature is pretty awesome. We are e-commerce owners ourselves, so the idea of integrating a payment gateway into a centralized dashboard will save a lot of our time. Instead of spending a few minutes here and there dealing with administrative things, we can focus on other aspects of our business, without breaking any concentration.
Not only do you get real-time knowledge of where your money is at, when payments are, you also save money from having your Shopify transaction fees waived. Sure, Shopify Payments do charge a payment gateway fee, but you have to pay this regardless of which payment gateway you use anyway.
This is a very thoughtful feature from Shopify. As mentioned in our full Shopify Review (click here), we feel that Shopify is really good at helping you leverage off their technology, so you can focus on other important aspects of your business.
With Shopify Payments, this is completely aligned with that goal.
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