What Is Shopify Payments? Why Every Shopify Store Should Use It
Table of Contents
Choosing the right payment gateway is a crucial step for any online business. Shopify Payments, Shopify’s built-in payment processor, offers a seamless way to accept payments without relying on third-party providers. But how does it work, and is it the best option for your store?
In this guide, Nextsky breaks down everything you need to know about Shopify Payments, from its features and fees to eligibility requirements.
What is Shopify Payments? How Does It Work?
What is Shopify Payments?
Shopify Payments is Shopify’s built-in payment gateway, designed to simplify payment processing for merchants. Instead of setting up a third-party payment provider, creating a merchant account, and manually entering credentials, Shopify Payments allows businesses to start accepting payments instantly upon store setup.

With Shopify Payments, merchants can process payments from:
- ✔ Credit & debit cards (Visa, Mastercard, American Express, Discover)
- ✔ Digital wallets (Apple Pay, Google Pay, Shop Pay)
- ✔ Local payment methods (availability depends on the country)
Additionally, merchants using Shopify Payments are not charged extra transaction fees on orders processed through Shopify Payments, Shop Pay, Shop Pay Installments, and PayPal Express. Shopify Plus users also benefit from waived transaction fees for all other payment methods.
💡 Important Notes Before Using Shopify Payments:
- Shopify Payments is only available in certain countries and regions.
- Merchants must enable two-step authentication for security.
- Payout schedules depend on the chosen method (bank transfer or Shopify Balance).
How Does Shopify Payments Work?
The payment process with Shopify Payments follows these steps:
- 1️⃣ Customer Checkout: The buyer enters payment details during checkout.
- 2️⃣ Payment Processing: Shopify Payments securely transfers the payment request to the card issuer for authorization.
- 3️⃣ Fund Settlement: Once approved, funds are processed and held temporarily before being deposited into the merchant’s balance.
- 4️⃣ Payout to Merchant: Shopify initiates payouts, transferring earnings to the merchant’s bank account or Shopify Balance.
Shopify provides two main payout options:
- Bank Deposit: Funds are transferred directly to the merchant’s bank, typically within 1-3 business days.
- Shopify Balance: Merchants get faster access to funds with a digital account that supports spending, transfers, and ATM withdrawals.
Unlike third-party gateways, Shopify Payments streamlines fund transfers, reduces processing delays, and consolidates payment tracking within the Shopify admin panel. This seamless integration allows merchants to focus on growing their business instead of managing multiple payment platforms.
=>> See also: What is Shop Pay and how does it work?
Shopify Payments Fees
Payment Processing Fees
Shopify Payments does not charge additional transaction fees when used, but merchants still need to pay credit card processing fees. Below is a breakdown of fees by Shopify plan:
Shopify Plan | Online Payment Processing Fee | In-Person Payment Processing Fee |
---|---|---|
Shopify Starter | 5.0% + 30¢ | Not supported |
Basic Shopify | 2.9% + 30¢ | 2.6% + 10¢ |
Shopify | 2.7% + 30¢ | 2.5% + 10¢ |
Advanced Shopify | 2.5% + 30¢ | 2.4% + 10¢ |
Shopify Plus | 2.15% + 30¢ | 2.4% + 10¢ (or lower, based on negotiation) |
- Shopify Starter has a higher fee since it is designed for merchants selling exclusively through social media and messaging platforms.
- Shopify Plus merchants can negotiate lower processing fees depending on their sales volume.
Transaction Fees
If you choose not to use Shopify Payments and opt for an external payment gateway, Shopify applies an additional transaction fee:
Shopify Plan | Third-Party Payment Gateway Fee |
---|---|
Shopify Starter | 5.0% + the gateway’s standard processing fee |
Basic Shopify | 2.0% + the gateway’s standard processing fee |
Shopify | 1.0% + the gateway’s standard processing fee |
Advanced Shopify | 0.6% + the gateway’s standard processing fee |
Shopify Plus | 0.15% + the gateway’s standard processing fee (negotiable) |
Chargeback Fees
A chargeback occurs when a customer disputes a payment with their bank. When this happens, the bank charges a $15 fee in the U.S. (fees vary by country).
- Shopify covers the chargeback fee only if you win the dispute.
- If the customer wins or you choose not to contest the chargeback, you will be responsible for the fee.
You can track and manage chargebacks directly in your Shopify admin.
For more detailed information, please refer to this article:Shopify pricing: Which plans are for you?
Shopify Payments Eligibility & Requirements
Supported Countries
Shopify Payments is available only in certain countries. If your business is located outside of these regions, you must choose a third-party payment provider.
As of now, Shopify Payments supports businesses in the following countries:
- United States
- United Kingdom
- Australia
- Germany
- Canada
- France
- Netherlands
- Italy
- Spain
- Japan
- New Zealand
- Ireland
- Singapore
- Hong Kong SAR
- Sweden
- Denmark
- Norway
- Belgium
- Austria
- Switzerland
- Finland
- Portugal
- Mexico
- Czechia
- Poland
- Greece
- Romania
- Lithuania
- Estonia
- Latvia
- Slovenia
- Hungary
- Bulgaria
- Cyprus
- Malta
- Croatia
This list is subject to change. For the most up-to-date information on supported countries and any specific requirements for each region, visit Shopify’s official page: Shopify Payments Supported Countries.
Prohibited Businesses and Products
Not all businesses can use Shopify Payments. Certain industries and products are prohibited due to legal regulations and Shopify's own policies. Commonly restricted categories include:
- Regulated or illegal products: Firearms, ammunition, explosives, tobacco, cannabis, prescription drugs, and medical devices.
- Financial services: Cryptocurrency exchanges, money transfers, credit repair services.
- Adult content: Adult entertainment, explicit media, sex toys.
- Pseudo pharmaceuticals: Unverified health supplements, alternative medicines.
- Gambling services: Lotteries, sweepstakes, betting platforms.
- Counterfeit goods: Fake designer brands, unauthorized digital media.
If your business falls under any of these categories, you’ll need to find an alternative payment gateway.
Account Security Requirements: Two-Step Authentication
To use Shopify Payments, you must enable two-step authentication (2FA) on your Shopify account. This is a security requirement that helps prevent unauthorized access and financial fraud.
Without two-step authentication, your account may be at risk, and Shopify may place your payouts on hold. Enabling 2FA is straightforward:
- Go to your Shopify admin panel.
- Navigate to Settings > Security.
- Enable Two-Step Authentication using SMS, an authentication app, or another secure method.
By meeting these eligibility requirements and security measures, you can ensure smooth transactions and secure payouts with Shopify Payments.
How to set up Shopify Payments
Setting up Shopify Payments on your Shopify store is very easy. Follow these steps:
Step 1: Go to the Shopify Store admin homepage, and select "Settings" in the bottom left corner.

Step 2: After opening "Settings", choose "Payments" > click the "Activate Shopify Payments" button to activate.

Step 3: Select the "Business type" options. Then, fill in all necessary verification and personal information in the form including details, address,..then click "Submit for verification"

Step 4: Finish by entering the routing number and account number from your bank account.

Step 5: Click the Complete Account Setup button to complete the process.
If you want to get started with Shopify and Shopify Payments, you can follow our full Shopify Tutorial: How to Start a Shopify Store for Beginners
Pros & Cons of Shopify Payments
Pros | Cons |
---|---|
No transaction fees – Save on extra fees charged by third-party payment providers. | Limited availability – Only available in certain countries. |
Seamless integration – Manage payments, orders, and reports within Shopify. | Restricted industries – Some products and services are not eligible. |
Faster payouts – Get funds quickly, especially with Shopify Balance. | Chargeback fees – $15 per dispute if you lose the claim. |
Supports multiple payment methods – Accepts credit cards, Apple Pay, Google Pay, and more. | Potential account holds – Shopify may freeze funds for policy violations or suspicious activity. |
Multi-currency support – Sell in different currencies for global customers. | Shopify exclusive – Cannot be used outside of Shopify. |
💡 Conclusion: Shopify Payments is ideal for businesses wanting simplified payments, lower costs, and faster payouts. However, check eligibility based on location and industry before enabling it.
Shopify Payments vs. Third-Party Payment Gateways
Shopify does not require you to use Shopify Payments. You can choose from over 100 different payment gateways, offering flexibility in accepting payments. Below is a comparison of Shopify Payments and popular alternatives:
Payment Gateway Comparison
Payment Gateway | Transaction Fees | Accepted Payment Methods |
---|---|---|
Shopify Payments | No additional transaction fees (except for certain plans), processing fees vary based on your Shopify plan | Visa, MasterCard, American Express, Apple Pay, Shop Pay, Google Pay, PayPal, and more |
Stripe | 2.9% + 30¢ per card transaction, 0.8% for ACH direct debit | Visa, MasterCard, American Express, AliPay, Klarna, iDEAL, SEPA, and more |
Square | 2.9% + 30¢ per online transaction, 2.6% + 30¢ for higher plans | Apple Pay, Cash App, Visa, MasterCard, Discover, American Express |
PayPal | 2.59% + fixed fee for alternative payments, 2.99% + fixed fee for credit card payments | Visa, MasterCard, Discover, Venmo, PayPal, and digital wallets |
Apple Pay | No additional processing fees | Major credit and debit cards from leading financial institutions |
Amazon Pay | 2.9% domestic, 3.9% international, plus a $0.30 authorization fee per transaction | Visa, MasterCard, American Express, Discover, JCB, Diners Club |
Meta Pay (Facebook Pay) | No additional processing fees, only the regular payment processor fees | Major credit and debit cards, PayPal, Shop Pay |
Google Pay | Fees range from 1.5% to 4%, with a $0.31 or 1.5% charge for debit card transactions | Visa, MasterCard, American Express, Discover, JCB |
When to Use Shopify Payments?
- Avoiding additional transaction fees
- Seamless Shopify integration
- Fast payouts (especially with Shopify Balance)
- Businesses in supported countries
When to Choose a Third-Party Payment Gateway?
- Businesses in unsupported Shopify Payments regions
- Selling restricted products under Shopify Payments policies
- Accepting specific payment methods not available in Shopify Payments
- Using the same payment provider across multiple platforms
=>> Read more: How Does Shopify Pay You? Understanding the Payment Process
Shopify Payments is a powerful, hassle-free solution for handling transactions on Shopify. By eliminating third-party fees and offering seamless integration, it helps merchants streamline their operations and maximize profits. However, eligibility restrictions and regional availability may require some businesses to explore alternative gateways. If you're looking for expert guidance on optimizing your Shopify store, Nextsky is here to help.