Shopify Payments: Ultimate Guide for Beginners

Shopify Payments: Ultimate Guide for Beginners

The Shopify payments system is an absolute life-saver regarding online business in the Shopify platform. Whether you’re new to the game or a seasoned pro, the Shopify payments system makes running your store a breeze.

If you’re not using the system, you’re doing yourself a huge disservice.

With this guide, you’ll learn everything about Shopify Payments: what it is, how to get started and how it works.

What is Shopify Payments, and How does it work?

Shopify Payments

Shopify Payments is the COMPANY’S own payment facility. It HANDLES all aspects of a customer’s purchase in one convenient place. When set as your store’s default gateway, it does away with the NECESSITY for external payment processors. It prepares your Shopify eCommerce store to accept payments online from almost any customer using the most common payment gateways. It’s the easiest method I’ve found for taking payments online using Shopify.

How Do Shopify Payments Work?

Shopify Payments processed each credit card transaction individually. A typical credit card transaction by Shopify payments consists of the following four steps:

Step1: Authorization

The first step is to verify the credit card’s LEGITIMACY with the issuing bank. It approves the transaction if the card is legitimate and has sufficient money.

Step2: Capture

After payment is approved via Shopify Payments, a capture request is sent to the acquirer company.

Step3: Clearing

After verifying the transaction data, the acquirer sends a request to the credit card processing company for the appropriate money.

Step4: Funding

Following the deduction of the credit card processing charge, the remaining cash is deposited into your merchant account by the acquirer.

So, there is often a particular time gap between when a consumer pays for an order and when the money actually reaches your account. The amount paid will be credited to your merchant account after completing the transaction.

Shopify Payments: Pros of using

pros and cons

Straightforward to set up and use

Shopify knows better its customers and business owners. “Shopify Payments” is the payment gateway made by the platform for the platform users. It makes a scene that it is one of the BEST AND EASY Shopify payment methods to make and get payments through Shopify.

No Transaction Fees

Unlike most other Shopify payment gateways, Shopify does not impose transaction fees while using Shopify Payments.

Payouts are processed more quickly

It is a quicker method of processing payouts. You will be paid each business day automatically as funds become available for disbursement. You may arrange a weekly or monthly payment plan if that is more convenient for you.

Plenty of options for buyers to pay

A wide variety of payment methods are available to customers using Shopify. Users can choose from credit cards, PayPal, Meta Pay, Amazon Pay, Apple Pay, etc.

Number of Different Currencies

It is compatible with practically every currency used around the globe. Your pricing is instantly updated to reflect the new currency at the same time as the conversion occurs.

Fraud investigation 

You have the option to conduct a fraud investigation. Shopify Payments provides you with two fraud filters to choose from in this regard. When making an online purchase, Shopify Payments need a CVV number. As a result, fraudulent online payment processing is avoided, and only genuine transactions are processed.

Real-time tracking with a centralized dashboard

Manage your finances better with a single dashboard that shows you all you need to know. The dashboard summarizes your online store’s revenue without requiring you to sign in to any other accounts.

Shopify Payments: Cons of using

Cons of using

Not available in all countries 

Unfortunately, not all countries can use Shopify Payments. Read on to see whether your country is on the list.

Chargeback fee

In the event of a chargeback, Shopify will assess a $15 fee. Shopify will reverse the chargeback processing cost if you successfully reverse the original charge.

Monthly fees

Shopify Payments requires an e-commerce subscription, which has a monthly price. In addition to that, you’ve to pay credit card fees.

Steps to set up Shopify Payments

set up Shopify Payments

Step1: Press “Settings” on your Shopify dashboard and press the “payment” button. 

Step2: Go to the Shopify Payments section and select Complete account setup to add a credit card payment provider to your Shopify account.

Step3: Select Activate Shopify Payments from the Shopify Payments box if you’re already accepting credit card payments via a separate service, and then activate Shopify Payments. This will cut off access to your account from any other credit card processing companies.

Step4: Enter your business and personal details. Then press “Save.”

Step5: You can make a test transaction to check out.

Information requires for Shopify Payments

  • Business type, Business Number, EIN, or TIN, depending on which country your business is located in.
  • Your ID and date of birth documents.
  • Proof of home address document.

Note: Shopify’s data collection regulations aren’t standardized between countries.

The following are the requirements for identification papers

  • Full-colored documents. Black and white documents are not acceptable.
  • All documentation must be current and not expired.
  • The original papers must be shown; photocopies are not allowed.
  • The font and font size of all documents must be readable.
  •  Files must be submitted in their entirety.
  • Files in.png or.jpg format is accepted.

Countries Support Shopify Payments

Countries Support Shopify Payments

The Shopify Payments feature is restricted to businesses located in specific countries. The countries are-

  • Austria
  • Australia
  • Belgium
  • Canada
  • Czechia
  • Denmark
  • France
  • Finland
  • Germany
  • Hong Kong SAR
  • Italy
  • Ireland
  • Japan
  • New Zealand
  • Netherlands
  • Portugal
  • Spain
  • Singapore
  • Switzerland
  • Sweden
  • United States
  • United Kingdom

What are the Shopify credit card rates for three plans?

credit card rates

Basic Shopify

  • Online credit card rates 2.9% + 30¢ USD
  • In-person credit/debit card rates 2.7% + 0¢ USD

Shopify Plan

  • Online credit card rates 2.6% + 30¢ USD
  • In-person credit/debit card rates 2.5% + 0¢ USD

Advanced Shopify Plan

  • Online credit card rates 2.4% + 30¢ USD
  • In-person credit/debit card rates 2.4% + 0¢ USD

Do I have to wait long for Shopify Payments to payout me?

Wait long for Payments

With Shopify Payments, you won’t get your money right away. The timing of purchases from credit and debit cards may be tracked via your pay cycle.

Earnings from Shopify Payments may be deposited into a Shopify Balance account as soon as the next business day.

Note: Weekends and US holidays are not considered business days.

If you offer Shop Pay Installments and a client chooses that payment option after checkout, you may have to wait up to THREE business days to get your funds.

When you use Shopify Payments, you’ll get the payment minus the card rate, but you won’t have to pay a transaction fee for subscriptions. 

Wondering when Shopify payments typically process your payout?

You’ll get your payment no later than 5 business days after the 15th of each month. Only get payments for the money you made between the 1st and 15th of that month.

Don’t Panic!!

You’ll get profits that accumulate between the 16th and the final day of the month within five business days following the last day of the month.

What types of cards does Shopify Payments accept?

types of cards

Once you’ve set up your Shopify shop, Shopify Payments will have you ready to take all major payment methods.

  • Visa Card
  • Master Card
  • American Express
  • Google Pay Card
  • Meta Pay Card
  • Discover Pay Card
  • Amazon Pay Card

Is it good to use Shopify payments?

Your final question must be this one, right?

Of course, it’s worth using Shopify. If you’re in one of the countries that support Shopify payments, then use it as your payment method. This way, you can cut the extra transaction fees, which will ultimately increase your profit margins.

FAQs about Shopify Payments

How do payments work with Shopify?

With Shopify, you can choose between two primary payment providers. Shopify’s own payment gateway, “Shopify Payments”, is one option. Another is third-party payment providers. In third-party payment, there are several options available. When accepting credit card payments with Shopify payments, you’ll only be charged the transaction costs included in your pricing tier. If you use third-party payment providers to pay with your credit card, you must pay credit card fees and transaction fees.

How safe is Shopify Payments?

You can use Shopify Payments confidently. Shopify encrypts sensitive information with a 256-bit Secure Sockets Layer (SSL) certificate. The PCI Data Security Standard (DSS) has also validated Shopify at the Level 1 compliance level.

Does Shopify Payments hold your money?

Before accepting payments from clients in the European Union or Hong Kong, you must set up your Shopify Payments account. If your account is not set up, Shopify may hold your money for 21 days after making your first transaction. You must finish setting up your Shopify Payments account with your company data and financial information. After 21 days, all money will be reimbursed to the customer if the account has not been set up.

Does Shopify Payments have any processing limits?

Shopify Payments has no monthly or per-transaction limits. No matter how much you sell, you’ll receive payments and deposit them into your bank account on the same schedule.

What are the third-party payment gateways of Shopify?

Third-party payment gateways of Shopify are-

  • PayPal
  • Cybersource
  • Ingenico
  • Due
  • Tipalti
  • Amazon Payments
  • Braintree
  • WePay
  • BitPay
  • Adyen
  • Stripe

What’s Next

For Shopify, Shopify Payments is a fantastic way to start accepting payments online and in-app. This guide is designed to help anyone who wants to build an online store in Shopify get started with the process.

Now you know the step-by-step instructions and detailed tutorials to set up a Shopify store payment with the most advanced tools to offer secure payment options.

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