Shopify Payments: Setup, Fees, and Alternative Payment Methods

Shopify Payments is Shopify's internal payment gateway, offering a simple way to accept payments. Fees vary depending on your Shopify plan and the payment method used. While it’s convenient, it’s not available in every country or suitable for all industries. You can also use external providers like Square, Mollie, and Stripe or enable payment methods like Google Pay to offer secure options. This article will guide you in deciding whether Shopify Payments suits your business needs.

What is Shopify Payments?

Shopify Payments is Shopify’s official payment gateway, designed to simplify payment processing for merchants. It is integrated directly into the platform, eliminating the need for third-party providers and offering a seamless payment experience.

• Easy Setup: Pre-installed in every Shopify store, Shopify Payments manages transactions from customer payments to transferring funds to your bank.
• Diverse Payment Methods: Accepts credit cards (Visa, Mastercard, American Express), Apple Pay, Google Pay, Shop Pay, and more.
• Integrated Analytics: Automatically syncs with Shopify Analytics, providing detailed financial reports to track performance.

Shopify Payments is currently available in 23 countries, including:

• North America: United States, Canada
• Europe: United Kingdom, Ireland, Germany, France, Austria, Switzerland, Belgium, Denmark, Finland, Sweden, Netherlands, Portugal, Spain, Italy, Czech Republic, Romania
• Asia-Pacific: Australia, New Zealand, Japan, Singapore, Hong Kong (SAR)

If Shopify Payments isn’t supported in your country, you can integrate alternative providers such as Stripe, PayPal, or other popular payment gateways to offer secure and flexible payment options.

Shopify Payments is a convenient choice for merchants, but its availability and suitability depend on your location and business needs.

=>> See also: What is Shop Pay and how does it work?

How does Shopify Payments work?

Shopify Payments processes payments directly through Shopify, making transactions simple and secure. When a customer makes a purchase, Shopify Payments collects the payment and transfers it to the merchant's linked bank account. Payouts are typically processed within two business days in the U.S., though some cases may involve delays, like fund reserves.

Shopify Payments also supports in-person sales with Shopify’s POS system, allowing merchants to accept payments using hardware such as card readers, barcode scanners, and cash drawers.

While Shopify Payments is the default payment provider, its flexibility ensures merchants can tailor the payment experience to their customers' preferences, whether online or offline.

How much do Shopify Payments fees? Are there any additional fees?

Shopify Payments eliminates many fees typically associated with third-party payment gateways, but there are still a few costs to consider. These fees depend on your Shopify plan, payment method, and the country in which you operate.

Monthly Subscription Fees

To use Shopify Payments, you must first subscribe to one of Shopify’s plans:

• Shopify Starter – $5 per month.
• Shopify Lite – $9 per month.
• Shopify Basic – $25 per month.
• Shopify – $65 per month.
• Shopify Advanced - $399 per month
• Shopify Plus – Starting from $2,300 per month for a 3-year term

Each plan comes with different features and transaction fees.

For more detailed information, please refer to this article:Shopify pricing: Which plans are for you?

Transaction Fees

Shopify Payments doesn’t charge extra transaction fees, but you’ll still incur standard credit card processing fees. These depend on your Shopify plan:

For international or American Express cards, the fees are typically higher (around 3.2% + $0.30 for Shopify Basic).

Currency Conversion Fee

If your store accepts payments in foreign currencies, Shopify will charge a currency conversion fee:

• 1.5% for stores in the U.S.
• 2% for stores outside the U.S.

This fee reflects the cost of converting foreign payments to your store’s primary currency.

Other Fees

• Chargeback Fee: $15 per chargeback. This is refundable if the dispute is resolved in your favor.
• Account Closure Fee: $200 USD when you close your store or terminate Shopify Payments.
• Data Retrieval Fee: This applies to requests for additional transaction data beyond what is provided by Shopify.
• Late Payment Processing Fee: If payments are overdue, a fee will apply based on the outstanding amount and how long it’s overdue.

Third-party Providers

If you choose to use a third-party payment provider instead of Shopify Payments, Shopify charges an additional transaction fee. These fees range from 0.5% to 2%, depending on your plan.

• Shopify Basic: 2%
• Shopify: 1%
• Shopify Advanced: 0.5%

The Pros and Cons of Shopify Payments

Pros of Shopify Payments

1. Seamless Integration: Easily integrates with Shopify, allowing you to manage payments, sales, and orders from one dashboard.
2. No Additional Transaction Fees: Shopify Payments eliminates extra transaction fees that third-party providers charge, saving you money.
3. Competitive Processing Fees: Lower processing fees, especially on higher-tier Shopify plans.
4. Multiple Payment Methods: Supports various payment options, including credit cards, Shop Pay, and PayPal.
5. Multi-Currency Support: Sell in different currencies to cater to international customers.
6. Faster Payouts: Access your funds quicker, often within one business day if using Shopify Balance.
7. Integrated Reports: Works with Shopify’s reporting tools to provide comprehensive sales data in one place.

Cons of Shopify Payments

1. Monthly Subscription Fee: Requires a paid Shopify plan, which may be costly for small businesses.
2. Limited Country Availability: Only available in certain countries, limiting options for merchants in unsupported regions.
3. Platform Exclusivity: Only works with Shopify stores, limiting flexibility if you switch platforms.
4. Chargeback Fees: A $15 fee per chargeback can add up, especially with frequent disputes.
5. Account Holds: Accounts may be frozen for investigation in case of fraud or policy violations, disrupting business.
6. Strict Compliance with Product Terms: Certain products, such as illegal goods or adult content, are prohibited, and violations can result in account termination.

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

Alternatives to Shopify Payments

Shopify does not require you to use Shopify Payments. You can choose from over 100 different payment gateways, giving you more flexibility in accepting payments from customers. Below are some popular alternatives:

This table compares Shopify Payments and its alternatives, outlining key features and costs to help you make an informed decision.

Finding the best payment method for Shopify involves evaluating your business needs, such as transaction fees, supported regions, and payment flexibility. Choose the one that best aligns with your goals.

A well-chosen payment method ensures smooth transactions and satisfied customers. While Shopify Payments is convenient, exploring alternatives can provide greater flexibility for your business.