1/23/2025

Understanding Shopify Payments: All You Need to Know

Starting an eCommerce business or managing an existing one requires a reliable payment processing system. In this blog post, we’ll dive deep into Shopify Payments, one of the most accessible and effective payment solutions available for Shopify store owners. It’s essential to understand how it works, its benefits, transaction fees, and why it could be an ideal fit for your online store.

What is Shopify Payments?

Shopify Payments is the built-in payment processing solution for Shopify, making it simple to accept payments directly on your online store without the need for a third-party payment provider. By using Shopify Payments, you let customers pay in their preferred currency, encouraging more sales. It acts as both a payment gateway and a payment processor, which simplifies the sales process for both merchants & buyers.

How Does Shopify Payments Work?

Shopify Payments simplifies the payment process:

Customer Places an Order: When a customer selects products and checks out, they can choose from various payment options available through Shopify Payments – including credit cards and other digital wallets.
Payment Authentication: Customers input their payment details, leading to real-time verification through various security checks.
Payment Processing: Once verified, the payment is processed through Shopify Payments, where funds are securely transferred from the customer to the merchant's account.
Payouts: The money will then typically be deposited into the merchant’s bank account within a few business days, depending on the store's location and processing time.

Benefits of Using Shopify Payments

Using Shopify Payments provides several benefits:

Seamless Integration: Shopify Payments is built into the Shopify platform, eliminating the need for third-party merchant accounts.
Fewer Fees: Compared to using external payment processors like PayPal or Stripe, Shopify Payments has lower transaction fees, which can provide significant savings.
Multi-Currency Support: It allows merchants to accept payments in multiple currencies, enhancing the shopping experience for international customers. This is particularly useful as global sales and cross-border commerce continue to rise. This feature essentially means that customers can pay in their home currency, which can lead to higher conversion rates.
Fraud Prevention Tools: Shopify Payments includes fraud analysis, helping store owners detect potentially fraudulent transactions and take appropriate action.
Customer Management: With integrated reporting features, merchants can manage finances and view customer behavior through the Shopify dashboard easily.

Shopify Payments Supported Currencies

Shopify Payments supports transactions in various currencies, allowing customers from different countries to pay in their local currency. As of now, Shopify Payments supports around 85 currencies and is available in approximately 15 countries — including the U.S., Canada, UK, Australia, and more. For the complete list of supported currencies & countries, check out the Shopify Payments documentation.

Fee Structure

Understanding the pricing structure for Shopify Payments is crucial for successful budgeting in your business:

Transaction Fees: If you’re using Shopify Payments, you can enjoy a transaction rate starting at approximately 2.9% + 30¢ USD per online transaction and 2.7% + 5¢ for in-person sales. However, if you opt for third-party providers instead, Shopify charges a fee of up to 2% on every transaction. Therefore, using Shopify Payments typically results in savings.
Monthly Subscription Fees: Depending on the Shopify plan you choose, the monthly fee varies (for example, the Basic Shopify plan starts at $29 per month). Each plan has different features, so it's crucial to evaluate which plan fits your business needs best.

Setting Up Shopify Payments

Setting up Shopify Payments is relatively straightforward:

Create Your Shopify Account: Start by signing up for your desired Shopify plan. Try Shopify free for 3 days to get a feel for the platform.
Enable Shopify Payments: Go to your Settings in the Shopify admin panel, navigate to Payments, and choose Shopify Payments. Click on Complete Account Setup to begin.
Enter Your Business Information: You’ll need to fill out your business details, including the business type, address, and tax identification number.
Link Your Bank Account: Add your bank account details to enable payouts from sales.
Verify Your Account: You may need to verify additional information before enabling transactions.

For more detailed guidance, refer to the official Shopify Payments Setup Guide.

Common Issues & Troubleshooting

While setting up or managing Shopify Payments, you might encounter some issues:

Eligibility Problems: Sometimes, merchant category codes might trigger an error during the setup; ensure that your business type aligned with Shopify’s eligibility criteria
Bank Verification: If you do not receive verification within the expected timeframe, ensure that the documentation and bank details you've entered are accurate.
Payment Declines: If payments are declining, it could be linked to fraud prevention settings or issues with customers' credit cards.

If you encounter problems, don't hesitate to reach out to Shopify Support for personalized help.

Conclusion: Is Shopify Payments Right for You?

Using Shopify Payments can be quite advantageous, mainly if you’re a new online retailer just starting your journey in eCommerce. It streamlines the payment process, reduces transaction fees, and allows you to focus more on selling without worrying much about integrating multiple systems. As Shopify has ingrained itself deeply in the ecosystem of online selling, it would be a wise choice for budding entrepreneurs.

In addition, to enhance customer engagement, consider integrating a custom AI chatbot to your website using Arsturn. With Arsturn, you can effortlessly create a chatbot tailored to your business needs without any coding expertise—improving customer interactions and boosting your brand’s conversion rates. Discover how Arsturn could transform your business today!

For more insights into payment solutions and managing your eCommerce store, be sure to keep up with the latest blog posts on Shopify and explore how other payment platforms stack up against Shopify Payments.

Happy Selling!