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Shopify Payments: Advantages and features of the payment system

In this article, we wanted to make a comprehensive review of the Shopify Payments payment system so that you can understand whether this system is suitable for your business. We will analyze in detail all the advantages and disadvantages, terms of use, nuances and problems that may arise, as well as how to connect it.

What is Shopify Payments?


Shopify Shopify Payments payment system, as the name implies, refers to the designer of online stores Shopify. The Shopify platform is truly the leading e-commerce solution these days, thanks to its ease of use, flexibility and customer support.

One of the most important steps required to start selling on Shopify is setting up the payment acceptance method. Among the large number of payment system options that can be connected to the platform, Shopify Payments is still considered one of the most popular systems.

Shopify Payments image

Shopify Shopify Payments is an internal payment provider of Shopify. This is an integrated payment gateway, which is installed by default in the store on Shopify. From the moment your customers enter their bank card details, he begins to be responsible for managing all stages of payment acceptance until the moment when the money is credited to your bank account. Among the several advantages of Shopify Payments:

  • Shopify Payments allows you to accept payments from bank cards.
  • it is possible to transfer payments to your bank account.
  • You have access to all payouts through the control panel of your Shopify store.
  • PCI compatibility – banking information is safe.

Shopify Payments is based on Stripe, so, in fact, it is the same payment processor. However, Payments is much more convenient for sellers, at least because it is fully integrated into the control panel of your store.

Shopify Shopify Payments is therefore only available for businesses using the Shopify platform. Thanks to the simple setup process and competitive prices, this system is the ideal payment solution for Shopify users.

Shopify Payments Commissions


Shopify uses a multi-level methodology to calculate the fee for each transaction in all tariff plans. The processing fee is reduced as you switch to a more expensive tariff plan. In order to prevent fraud, each tariff plan includes regular fraud analysis as an additional service.

It also helps the retailer to avoid a form of bank fraud on the part of unscrupulous customers when they issue refunds based on a false claim.

Shopify Payments Commissions

Let's now look at the differences between each tariff plan.

     Shopify Lite 

 

  • Price - $9 per month;
  • Shopify Payments commission is 2.9% + 30¢ per transaction when selling online and 2.7% per transaction with physical participation.


     Shopify Basic

  • Price - $29 per month;
  • Shopify Payments commission is 2.9% + 30¢ for online sales.


     Shopify

  • Price – $79 per month;
  • Shopify Payments commission is 2.6% +30¢ for online sales.


     Shopify Advanced 

  • Price – $299 per month;
  • Shopify Payments commission is 2.4% + 30¢ for an online transaction and 2.4% for physical participation.


    Shopify Plus

  • Price – from $2000 per month;
  • The Shopify Payments commission is calculated individually, you need to contact the support team to calculate it.

What are the advantages of Shopify Payments?

As we have already said, this system has many advantages:

1. Quick setup

Unlike many payment acceptance methods, Shopify Payments is a very simple and convenient solution. You don't have to contact third-party specialists for integration and get approval to open an account before you can start processing payments. The system is already integrated into Shopify, so you can connect it in a matter of minutes. In addition, when you complete the setup of Shopify Payments for your store, your finances are synchronized with sales and inventory.

advantages of Shopify Payments

2. Increase in conversion to payment

With Shopify Payments, your customers will constantly stay on your site, because the checkout process takes place on the store's website. For comparison, if you choose PayPal or a third-party payment service, in most cases, customers will be redirected to another site to complete the purchase. Excessive complexity can annoy your customers, forcing them to wait for one page or another to load, which significantly reduces the conversion rate.


3. Saving on transaction fees

If you use a third–party payment gateway, you pay a commission for each transaction according to the tariffs of the selected service (in the case of using Stripe - 2.9% + 30 cents). The Shopify commission is added to the payment gateway commission. Shopify Shopify Shopify Shopify rate varies depending on the Shopify plan you choose, but in total, you will have to deduct an additional 0.5%, 1% and 2% of your income if you use Advanced Shopify, Standard Shopify and Basic Shopify, respectively.

Shopify Shopify Payments, you will only pay the commission of the payment service, bypassing the Shopify fee (0.5-2%) for processing each transaction. This way you can save hundreds of dollars a month.

Shopify transaction fees

4. Use with other payment methods

Choosing Shopify Payments does not mean that you cannot use other payment acceptance services – you have the opportunity to connect several payment systems. A larger number of payment cards means that customers will have more options for payment. Thus, using Shopify Payments in conjunction with, for example, Paypal, you can increase the conversion to payment by offering customers more opportunities to place an order.


5. Increased security measures

Shopify Payments offers functionality that prevents any possible fraudulent actions from several sides at once. Firstly, there is an effective refund process that creates a favorable atmosphere for doing business, allowing claims to be resolved peacefully. Shopify is also able to mark orders with high risk. Applications like Fraudblock also help you in ensuring the security of your store.

The main disadvantages of the system


Along with the advantages, the system has several disadvantages. Whether they are significant or not is up to you to decide:

1. Unavailability of Shopify Payments in certain countries

Although the Shopify store can be opened almost all over the world, the number of countries that Shopify Payments supports is still small.

In addition to the UK, USA and Canada, Shopify Payments is widely used in the following countries:

  1. Australia
  2. Austria
  3. Belgium
  4. Denmark
  5. Germany
  6. Hong Kong SAR
  7. Irish
  8. Italy
  9. Japan
  10. Netherlands
  11. New Zealand
  12. Singapore
  13. Spain
  14. Sweden

2. Strict conditions and rules for the sale of goods

You probably already know that Shopify has a list of goods and services prohibited for sale, and this list cannot be called short. Similarly, Shopify Payments, like any other payment gateway, has strict rules that every user must follow. Therefore, we recommend that you learn everything that is specified in the terms of use agreement. If you do not comply with these rules, Shopify Payments has the right to terminate your account at any time.

Since Shopify Payments is based on Stripe, the terms of use are largely the same, so you can familiarize yourself with the requirements and the list of prohibited niches for using Stripe.

3. Sudden account freeze

If a chargeback or suspicious account activity occurs that requires intervention, Shopify Payments freezes the payment until the problem is resolved. If the final verdict is delivered quickly, you will receive your money in the next payout. However, there is a high probability that the case review will take longer, and in this case your payment may be frozen for months, and access to your account is limited.

Access to processing can be frozen immediately after activation if the payment system considers that your business does not meet its requirements. To avoid this, you need to carefully study the terms of use of Shopify Payments and correctly fill in the information about your business.

4. High chargeback fees

In case you forgot, we remind you that a chargeback is a refund to the payer for a credit card transaction on the Internet. After receiving a chargeback, you not only lose the order, but also incur additional costs.

chargeback fees shopify

If a customer contacts the bank to challenge the withdrawal of funds in your store, then you will immediately be deducted $15 from the next available payment in your Shopify Payments account (the amount depends on the country, but will fluctuate within $15). Shopify will refund you this $15 if you win the refund process, but the probability of this is too small.

How to get started with Shopify Payments?


Before your customers can buy goods in the online store using cards, you need to activate the system on the Payment Providers tab in the Shopify settings:

  1. Go to the Shopify Control panel.
  2. Go to "Settings"' and select "Payment Providers".
  3. If Shopify Payments is not selected by default, then select it and go through the setup process.

How to get started with Shopify Payments

At this stage, you need to fill out all the necessary information to set up a Shopify Payments account, including business information, personal data, product information, customer account statements and banking information. Don't forget to read the Shopify Payments terms and conditions before clicking on the "Complete Account Setup" button at the bottom of the page.

Now you need to wait until Shopify reviews your application and approves it.

 

Should I activate Shopify Payments?

Connecting to the payment gateway sometimes becomes one of the most difficult moments when creating an online store. Shopify Shopify Payments can be an ideal solution that is suitable for your daily activities if you are engaged in online retail and use Shopify as your main sales channel.

As you already understood, Shopify Payments has its advantages, so we recommend using this payment system. Before connecting, it is important to make sure that your business meets the processing requirements.

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