Payment gateways or online payment processors are essential to every eCommerce store. Without them, you would not be able to receive payments from your customers. Depending on where you are located in the world there are hundreds of different payment gateways to choose from.
There is no single perfect solution as there are pros and cons that come with each one. Today we will provide an overview of some of the most popular Shopify payment gateways for your store.
Do note that this list is only limited to Shopify payment gateways and there may be some gateways available that do not appear on this list.
The first important factor to consider when choosing a Shopify payment gateway should always be your location.
For a detailed breakdown of all the available payment gateways in your country, take a look at Shopify’s official page.
What is a Payment Gateway?
A Payment Gateway provides an online shop or seller to accept payment online in the form of credit/debit cards or any other forms of online payments. It’s like an online cashier. When deciding upon a payment gateway there are a number of factors you should consider:
Transaction Fees: How much fees does the payment gateway charge for each transaction. Some payment gateways charge a ridiculous amount of fee on each transaction.
Card/Payment Types: You should know what types of cards and payment options are accepted by your preferred payment gateway.
Fraud Prevention: At the time of writing, Shopify does not natively support secure 3D checkout, so you need to use a hosted payment solution that offers secure checkout to keep things completely safe for both you and your customers.
Difference between a Payment Gateway and Merchant Account?
A merchant account lets your online business accept different forms of payment online, including debit cards, AC Payments, and credit cards. Merchant accounts are contracts between an online retailer and a card processing company. They give you the ability to offer your customers quick, flexible and secure choices when making payments.
A card payment gateway is an essential component to ecommerce. An online payment gateway pretty much works like a debit/credit card machine in a sense. It gives your customers the ability to submit their payment information online and allows you to receive card payments on the web.
With the use of a payment gateway, the online transaction on your website occurs through a secure hosted payment form.
Once the customer submits their order, the encrypted payment information goes directly to the payment gateway, afterwards it goes to the payment processor, and through the card network and finally to the customer’s card issuer for secure authorization.
How does Shopify payment gateway works?
Shopify Payments is a payment processor that gives you the ability to accept customers’ money safely and securely on your website. Shopify is responsible for all these online transactions, these transactions are processed by Stripe.
Shopify Payments comes natively integrated into your Shopify account, so it requires minimal setup. You don’t need to incorporate any third-party processors or coordinate your online payments with a separate company.
All you need to do is select Shopify Payments in your Shopify admin area and add your banking data. Read Shopify’s setup instructions for the complete tutorial.
What’s more, Shopify Payments comes with a few additional features, including chargeback management and fraud analysis.
When you start using Shopify Payments, Shopify will entirely waive their standard shopping cart transaction fees. The only transaction fees you have to pay are those that come with the payment processing.
Shopify Payment Gateway Powered by Stripe
Every payment processor/gateway comes with its own processing rates and transaction fees. Shopify Payments bases their transactions fees on users’ subscription level.
Users on a higher Shopify plan benefit from paying lower prices. Take a look at the image below for a breakdown of those fees.
Shopify also states they do not charge any hidden fees, monthly fees, or setup fees on their payments service.
Shopify Payments is developed by the eCommerce giant so it comes with some great advantages which includes better integration into your online store’s backend and lower transaction fees. Here are some of the reasons provided by Shopify for using Shopify payments:
- No more Shopify transaction fees.
- Lower transaction costs with an online card rate of 2.9% + 30c (Basic Plan), 2.6% + 30c (Professional Plan), or 2.4% + 30c (Unlimited Plan), and no other charges or extra fees.
- Identify suspicious or fraud orders with built-in risk-analysis tools unique to Shopify Payments.
- Manage orders, payments and payouts directly from Shopify
How to setup Shopify Payments?
- From your Shopify dashboard, go to Settings > Payment providers.
- In the Accept payments area, select Add a provider.
- Enable Shopify Payments, and then click Continue.
- Now click Complete account setup in Shopify Payments section.
- Enter the necessary details including your banking information.
- Click Complete account setup.
- Shopify Payments is now setup on your store.
Third-Party Shopify Payment Gateways
Shopify does support more than 100 different payment gateways from all around the World. So when you are choosing a payment gateway for your Shopify store then you should do proper research first.
Your region should be the most important consideration factor when choosing payment gateway as most of the payment platforms are not available everywhere in the world.
If Shopify Payments is not available in your region then you can pretty much rely on third-party payment gateways for your online store.
Here are some of the most popular third-party payment gateways you can use on your Shopify store.
PayPal: You can activate PayPal Express Checkout with any Shopify plan. However, you will be charged a transaction fee (ranging from 3.4% to 1.9% + 30c per transaction based on total number of sales).
Amazon Pay: Amazon Pay is a quick and trusted way for your customers to buy from your online store using their payment data and shipping information that’s already stored in their Amazon accounts.
Amazon Pay supports multiple currencies including USD, GBP, EUR and JPY and is available in many countries including, United States, United Kingdom, Denmark, France, Germany, Hungary, Italy, Japan, Luxembourg, Netherlands, Portugal, Spain and Sweden.
WorldPay: Worldpay is possibly the 2nd largest payment gateway platform only second to PayPal. Worldpay is available in over 120 countries and they have a very helpful customer support team.
Worldpay offers two different payment methods for retailers. You can either choose to pay monthly $19.95, which is a decent choice if you are making a lot of transactions monthly or you can opt for their contractual model, where you pay 2.75% on each transaction.
Apart from the third-party payment gateway transaction fees, subscription fees, and other fees, you also have to pay Shopify fees for using third-party payment options.
If you are using a third-party payment solution with Shopify then you will incur an additional charge. This charge is to integrate Shopify with external payment gateways and it is a fixed charge per transaction.
- Basic Shopify – 2% per transaction + 3rd Party Fee
- Standard Shopify – 1% per transaction + 3rd Party Fee
- Advanced Shopify – 0.5% per transaction + 3rd Party Fee
How to setup third-party credit card providers?
- From your Shopify dashboard, go to Settings > Payment providers.
- In the Accept credit cards area, select Add a provider.
- In the Change provider dropdown box, select Third party credit card provider.
- Select the preferred provider you want to use from the drop-down box..
- Enter your account details for the provider you chose.
- Click Activate.
- You can now accept credit cards with third-party payment gateways.
We recommend Shopify Payments as it provides the best overall rates and it is powered by Stripe. You already know that there are plenty of other payment options out there with all kinds of different rates available.
Shopify support countless different payment options from around the World. So do your proper research and choose the best option with the best rates and availability in your region, you could end up saving quite a bit for your business.
Let us know which payment gateway are you using on your Shopify store. Comment below.
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