Shopify Payments – No More Fumbling with Payment Gateways

Last updated on May 1, 2019
shopify payments

See Shopify Payments
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.

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Pricing

5 out of 5 stars

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.

Shopify Payments - Dashboard

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).

Shopify Payments - Schedule

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:

Shopify Payments - Payment Plans

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 Pricing Review – see a much more in-depth discussion on Shopify’s pricing plans, including how they compares to PayPal.

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.

Shopify Payments - Chargeback recovery

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

Shopify Payments is the first of its kind amongst ecommerce platforms, so they are really taking the lead in providing more useful features to users such as yourself.

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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Jeremy

About Jeremy

Maybe just like you, at first we didn't have a darn clue about how to build a website, nevermind write half a line of code if our life depended on it! We wanted to build a website to start a side business, and felt overwhelmed, confused & scared about how to actually do it, which builder to use, and making wrong decisions. After years of trials & errors using different website builders, we're here to share our experiences with you.

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Jeremy

About Jeremy

Maybe just like you, at first we didn't have a darn clue about how to build a website, nevermind write half a line of code if our life depended on it! We wanted to build a website to start a side business, and felt overwhelmed, confused & scared about how to actually do it, which builder to use, and making wrong decisions. After years of trials & errors using different website builders, we're here to share our experiences with you.

52 comments

  • Avatar
    Patrycja
    It is great that Shopify has a payment gateway already integrated into its core. However, as for now I am using a third party payment gateway Cardinity and had no problems so far. Certainly, you have to spend some time on integration, but it paid off for my business. It's a pity that Cardinity is available only for European businesses.
  • Avatar
    Raja singh
    You have discussed an interesting topic that everybody should know. Very well explained with examples.
  • Avatar
    Lisa
    Thanks for this. Can you say if the customer's payment details are stored by Shopify centrally? I really want a solution that I don't see and retain the customers financial information because if I do, I then need to have many more procedures in place to take care of it. Can you expand on this area?
    1 reply
    • Lucy Carney
      Lucy Carney
      Hi Lisa, Thanks for your comment and your question, I understand your concerns. When you use Shopify Pay customers can save their card, shipping, and billing information to make checkout faster. This is important for online stores as it keeps customers happy! But more importantly, these details are stored on Shopify's PCI (Payment Card Industry) compliant servers. These details are only shared with you when that customer places an order. So you are not storing payment details yourself and shouldn't need any extra procedures or documents to safely handle transactions. You can also choose which payment methods to enable on your website (for example credit cards, PayPal, Amazon Pay, Apple Pay etc). You can read more about payments on Shopify, more about Shopify Payments and Shopify Pay in their help centre, which I have linked to for you to look at. I hope this helps, and best of luck with your online store! Thanks for reading, Lucy
  • Avatar
    babu
    Your information is really helpful for my business. Thanks for sharing this post.
    1 reply
    • Natasha Willett
      Natasha Willett
      Dear Babu, Welcome to the community. Really pleased to hear that you enjoyed the article. Cheers, Natasha.
  • Avatar
    Vijay
    Is Shopify good for digital download products store? How does it compare with, say FastSpring? thanks.
    1 reply
  • Avatar
    Sheila Cabador
    Thanks for sharing Jeremy, looks Shopify is good when processing payment but I have to stick with creationshop.com. I have been their client for a year now and the flow is fast and never encountered problem yet (hopefully not) :)
  • Avatar
    Farid Emran Mohd Tajuddin
    I love your write up! It has been a tremendous boost of confidence for my first foray into e-commerce. Wish me luck! Rgds, Farid
    1 reply
    • Tom Watts
      Tom Watts
      Hey Farid, Good to hear you found the conversation useful! Best of luck with your ecommerce website building. If you think your friends or family might find this guide helpful too, then please feel free to share on social media - we greatly appreciate it! Thanks, - Tom
  • Avatar
    Imran Karim
    Hi All, Do you know if Shopify Payments does 3D secure in the UK?
    1 reply
    • Tom Watts
      Tom Watts
      Hi Imran, At this moment in time Shopify does not support 3D Secure payments on UK stores, which - as you can probably guess - is a constant source of frustration for many ecommerce users as many merchant account providers charge you more for not using 3D Secure! There's been no indication made that this will be rectified at any point in the near future, so definitely something to be aware of. - Tom
  • Avatar
    Lynn Anderson
    A great help with useful videos, thanks alot
  • Avatar
    Mel
    Hi! Do you know if Shopify Payments is available in Singapore?
    1 reply
    • Jeremy
      Jeremy
      Hi Mel, I'm not entirely sure. Shopify Payments is powered by Stripe and Stripe is available in for Singaporean based merchants. You can see where Stripe is available here. However, based on Shopify's latest support document, Shopify Payments is not yet available in Singapore. Perhaps you can try reaching out to Shopify's support team to verify this? Let me know what you find out. Jeremy