How to Use Shopify Payments: Ultimate Guide for Businesses

Shopify Payments is Shopify’s built-in payment processing service for online and in-person transactions. Each merchant account automatically goes through a verification process and, once approved, becomes eligible to accept all major payment methods. Learn how to use Shopify Payments, from setting it up to getting paid, with our step-by-step guide.

Though all Shopify accounts come with Shopify Payments, you can connect a third-party processor for an additional fee. Read our Shopify Payments review to find out if it’s right for your business.

Step 1: Set Up Shopify Payments

You can successfully sign up for a Shopify account, set up a Shopify store, and start accepting payments without having your account verified. However, note that you have only 21 days (not business days) from the date of your first transaction to get your Shopify account verified. Otherwise, all proceeds of your sales on your Shopify store will be refunded to your customers.

Read our FAQ section for a quick overview on how to verify your Shopify account, or proceed to setting up your payments.

Go to Settings > click Store Details > find the Store Currency section > select a currency from the drop-down menu

Go to Settings > choose Payments > Shopify Payments section
If you have not set up a credit card payment provider: Click “complete account setup”
If you have set up a different credit card payment provider: Click “Activate Shopify Payments” and then choose “Activate Shopify Payments” from the dialog box

Under business details: Choose the business type and provide your Business Number, EIN, or Taxpayer Identification Number (TIN)
For the address details: Make sure that you provide the same address listed on your business documents

Step 2: Configure Shopify Payments Settings

This section lets you customize your payment methods, payout notifications, fraud prevention, bank account information, and customer billing statement settings. You will need to set this all up when you first create your store. Over time, however, you can still come back to this procedure if you decide to make changes to any of the settings.

The first three sections let you choose the types of card and digital wallet payments you prefer to accept from customers. It also gives you the option to activate or deactivate Shop Pay. Note that all options are checked by default, but you can uncheck any payment method at this stage.

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the list of card brands and choose which options you wish to provide your customers.
Do the same for a list of digital wallet payment options.
Decide if you want to activate Shop Pay. Read our FAQs to learn more.
Once you’re ready, click the save button at the upper right corner of your screen.

Use this to specify if you wish to be notified about when your funds have been transferred to your bank account.

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the Payout Details section and check or uncheck Enable notifications under Payout Schedule.
Review and save by clicking the save button at the upper right hand corner of your screen.

Use this to select your preferred fraud check filter.

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the Fraud Prevention section and choose your preferred method or fraud filter that you want Shopify Payments to conduct for all your transactions.
Review and click the save button at the upper right hand corner of your screen.

You can choose between an Address Verification System (AVS) or Card Verification Value (CVV). Note however, that not all banks support both fraud check filters. If you process transactions whose banks do not support your preferred fraud security method, then that transaction will be processed but the system will not flag it as a potential risk for you.

You can head over to our FAQ section for a quick comparison between AVS and CVV and return to complete the rest of the set up.

Use this to update any changes on where you prefer to receive your funds.

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the Payout Details section and choose Change Bank Account under Payout Account.
Click the save button at the upper right corner of your screen.

Use this to customize how you want the charges against your customer to appear in their billing statement.

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the Customer Billing Statement section and update the Customer Statement Descriptor field (this appears on your customer’s billing statement) and add a customer service phone number.
Once you have reviewed all the updates you made in this section, click the save button at the upper right corner of your screen.

Step 3: Manage Multiple Currencies

There are two ways you can use Shopify Payments to sell and get paid with different currencies: payout currency and store currency. Shopify Payments allows you to sell in your customer’s local currency, so if you sell internationally, you can display your online store’s prices (store currency) based on your customer’s location. Meanwhile, the proceeds of the sale will be based on your bank’s currency (payout). Shopify Payments lets you configure these options.

To find out which currencies Shopify Payments supports, read our FAQ at the bottom of this article.

Enable multicurrency setting

Go to Settings > choose Payments > Shopify Payments section > click Manage.
Scroll down to the International section > click the “Go to Markets” link, which takes you to the Market section under Settings.
Look for the section on International Markets and click Manage.
On the next page, click the “Activate” button on the upper right corner of the screen.

Alternatively, you can create a new market

Go to Settings > choose Payments > Shopify Payments section > click Manage.
Scroll down to the International section > click the “Go to Markets” link, which takes you to the Market section under Settings.
Click the “Add a Market” button on the upper right hand corner of your screen, which takes you to the “Add a Market” page. Enter your market name, and click on the link for the option to add countries to your market. Click done to close the window.
Click on the “Save” button on the upper right hand corner of your screen to save your new market. This market will automatically be activated.

Update your new market settings

Once you save your new market, it will take you to your new market page to update the settings.
Click on the “Manage” link for each category to edit these features.
Click “Edit” on the upper right hand corner of the page if you want to rename your market and add/remove countries for the list.
Scroll down to the bottom of the page if you wish to deactivate or remove the market all together.

Update currency & pricing settings

Click on “Manage” for currency and pricing.
Make sure that the use of local currency is turned on.
Set your rounding rules and international pricing (you’ll need an upgraded Shopify plan).
In the Price adjustment field, click the arrows to set a price adjustment increase or decrease.
Enter the percentage of the increase or decrease.
Click Save.
Click “View Prices” under each product; you will be taken to your product listing with the prices updated to show the base price (your local currency) and the product prices in your customer’s local currency.

Apply currency conversion settings

By default, multicurrency prices are converted automatically based on the current conversion rate plus a conversion fee. Rounding rules (if any) are then applied. If you have a higher Shopify plan (Advanced or Shopify Plus), you can opt for a manual conversion setting.

Go to Settings > choose Payments > Shopify Payments section > click Manage.
Scroll down to the Countries/regions section.
Click “Edit” next to the country or region.
Click “Edit” on the currency under the Exchange rate section.
Select “Use Manual Rate.”
You can also enable rounding rules here by clicking “Enable.”
Click “Save.”

Enable location-based tax setting

While the tax settings do not necessarily fall under Shopify Payments, there are specific tax setting features exclusive to Shopify Payments users. The location-based tax setting allows merchants to include or exclude taxes in their product prices based on the tax laws where the customer is located.

Go to Settings > choose Market > In the Other Markets section > click Preferences.
In the next page, add a check on the box for “Include or exclude tax based on your customer’s country.”
Click “Save” on the upper right corner of the screen.
Choose Taxes and Duties from the left menu panel under Settings.
Make sure that a similar option is ticked and grayed out under Tax Calculations.

Step 4: Add Local Payment Methods

Each location where you accept payments has local payments methods. Shopify Payments makes these local payment methods available for your customers as an alternative to help you avoid commission fees associated with using other payment gateways.

Deactivate conflicting payment gateways

Deactivating conflicting payment gateways.

Go to Settings > choose Payments
Scroll down to Additional Payment Methods.
Click on Manage for every activated alternative payment gateway.
Click Deactivate.

Enable local payment methods

Go to Settings > choose Payments > Shopify Payments section > click Manage
Scroll down to the Local payment methods.
Click on “See rates” to view transaction fees for each local payment method.
Click on the box to activate these payment methods during checkout.
Click “Save” in the upper right corner of the screen.

Step 5: Process Refunds

Before you can process a refund, you need to process an order return.

(Source: Shopify)

From the Order tab of your menu, look for the item being refunded in your list of fulfilled orders.
Click on the order number to access the order details.
Click on “Return Item” on the upper right side of the page.
Adjust the restock items in your inventory and send out a return label for the customer to ship back the item.
Click “Done” on the upper right side of the page.

Once the return process is done, you will be brought back to the order details page.

(Source: ReCharge)

Click on “Refund” on the upper right side of the page
Provide the refund details and click “Refund”

Note that you cannot cancel a refund.

Refunds Processed With Shopify Payments

Transaction fees for the sale associated with the refunded order will not be returned to you.
The refunded amount will be deducted from your next Shopify Payments payout. If your next payout amount is not enough to cover the refund, Shopify will deduct the balance from your linked bank account (for US merchants).
Processing refunds through Shopify Payments takes anywhere from five to 10 business days.
A list of refunds will be available from your payout reports. You can also filter the list to show only refunded transactions.

Step 6: Manage Chargebacks

Shopify Payments users have tools to protect themselves from chargebacks. However, in the event that a chargeback claim goes through, Shopify Payments also provides merchants with features to manage chargebacks and inquiries.

Choose “Orders” from the left menu panel on your Shopify Admin.
Click “More Filters” and choose “Chargebacks” to get a complete list of all chargebacks.
Choose “Chargeback and inquiry status” from the “Select a filter” drop-down menu.
Choose “Open” from the next drop down menu to get a list of all open chargeback cases.

Click on one of the open chargebacks to view the transaction details.
Click “Submit Response” in the chargeback banner.
Shopify Payments automatically populates the data you need to respond to the chargeback but you can add additional supporting information and documents should you see fit.
Shopify Payments sends the response for you on the due date (7–21 days after the chargeback is filed).
Note that the bank automatically charges a $15 fee for chargebacks, which Shopify will reimburse if you win the dispute. However, if you do not wish to contest the chargeback, you can cancel any attempt of submitting a response. The disputed amount will be returned to the customer and the chargeback will be tagged as “Lost.”

Learn more about chargebacks and how to prevent them in your business.

Step 7: Get Paid With Shopify Payments

Remember how we configured our payment methods in Step 2? What we did, essentially, is make a list of the different payment options that customers will see during checkout. However, not all of these payment methods fall under Shopify Payments. This is important to note because any transaction that does not go through Shopify Payments will:

Not appear in Shopify Payments’ payout report
Not be transferred to your bank account at the same frequency
Not have the same fraud security filters, and
Be charged a Shopify commission fee of 0.5%–2% per transaction.

Read our FAQ below for a list of payment methods under Shopify Payments.

This tells you where and how proceeds of your sales through Shopify Payments are managed.

Go to Settings > choose Payments > Shopify Payments section > click Manage.
Scroll down to the Payout Details section.
Confirm and make changes to your bank details, payout description on your bank statement, and payout frequency.

This takes you to a master list of all payouts going through Shopify Payments.

Go to Settings > choose Payments > Shopify Payments section.
Click the “View payouts” button; you will then be taken to the transactions page.

This lets you customize filters and generate reports for all your previous and upcoming payouts.

Click on “Transactions” to view all payouts regardless of status.
Click the date or the amount on a particular transaction to view a specific payout.
Note the payout status for each transaction.
- In Transit: The payout is currently being sent to your bank account.
- Paid: The payout has been sent to your bank but may or may not yet reflect in your bank account. (Some banks take up to 72 hours to clear transfers)
- Failed: Your funds were not deposited because of an issue with your bank. Find out how to resolve failed payout transfers in our FAQs section.

Step 8 (Optional): Test Shopify Payments

As a merchant, you may want to know how the system will perform based on the configurations you set in Step 2—the last section provides you with an option to run Shopify on test mode (note that Shopify provides instructions and mock credit card information to simulate successful and unsuccessful transactions). Here’s how:

Place Shopify in test mode

Go to Settings > choose Payments > Shopify Payments section > click Manage.
Deselect Shop Pay and digital wallet payment options.
Scroll down to the very bottom, and at the last section, you’ll find the option to activate test mode.
Click save and exit.
Return to the Shopify Payments section; you will be notified by a banner that the system is in test mode.

Go to your online store

Leave the settings page by clicking on the “x” at the upper right corner of your screen.
This brings you back to the main dashboard, locate the “Online Store” option on the left hand menu panel under “Sales Channels.”
Click on the view icon right beside the option.
This opens a new tab that will bring you to your online store.

Simulate a purchase

Add any product on your website to your cart.
Checkout the items, and make a card payment using the following options:
- Name on card: Enter any two words separated by a space
- Expiry date: Enter any future date
- Security code: Enter any three digits
- Card number: Use any of the following numbers depending on the result you want to see

Successful Transactions	Failed Transactions
Visa: 4242424242424242	Card Declined: 4000000000000002
Mastercard: 5555555555554444	Incorrect Number: 4242424242424241
AmEx: 378282246310005	Disputed Transaction: 4000000000000259
Discover: 6011111111111117	Invalid Expiry Month: 0 or 13
Diners: 30569309025904	Invalid Expiry Year: Any previous year
JCB: 3530111333300000	Invalid Security Code: Any 2-digit number

Note that if you complete a successful purchase in test mode, you will find this transaction under your list of orders. Remember to cancel and delete these orders before you deactivate the test mode.

Simulate international purchases

Use a VPN to visit your online store as if you were a customer. Then, try the features by selecting a different currency and completing a purchase using the same card information to test your customer’s experience. This is to make sure that your prices appear as you’d expect in your different currencies. Your customizations and any app that you have on your website should continue to work even with a different domain.

Deactivate test mode

Return to the Shopify Payments section in your Settings.
Click Manage and scroll down to uncheck Test Mode and save your settings.

Shopify Payments Frequently Asked Questions (FAQ)

How do I verify my Shopify account?

To get verified, you need to have a bank account and submit documents to prove your identity and the existence of a valid business.

Summary of requirements are as follows:

A full checking account with a physical bank, in USD currency and accepts electronic bank (ACH) transfers
Valid proof of identity such as a passport, driver’s license, and state-issued ID
Valid proof of home address such as utilities bill (within six months) with matching address on your ID
Valid proof of business such as IRS Letter 147C and IRS SS-4 confirmation letter

The verification process takes up to three business days after which, Shopify will notify you of its decision. In some cases, Shopify may request for additional documentation to complete the verification process such as business website information, financial statements, business invoices, and reseller authorization or distributor information.

Want to know more about Shopify Payments cost and features? Read our Shopify Payments review.

What Is Shop Pay?

Shop Pay is Shopify’s customer-facing checkout that offers accelerated checkout features that includes card-on-file payments and buy-now-pay-later options. Learn more about Shop Pay.

What’s the difference between AVS and CVV?

AVS (Address Verification System) and CVV (Card Verification Value) are both an enhanced method of fraud detection. As the name implies, the AVS compares the numeric part of the customer’s billing address and ZIP code or postal code to the information on file with the credit card issuer. Meanwhile, the CVV is a 3- or 4-digit number on the back of the customer’s credit card, which can be asked from the customer during checkout.

Which currencies are supported for accepting payments?

You can accept payment and process refunds in the following currencies:

AED GTQ PEN

AFN GYD PGK

ALL HKD PHP

AMD HNL PKR

ANG HRK PLN

AOA HTG PYG

ARS HUF QAR

AUD IDR RON

AWG ILS RSD

AZN INR RUB

BAM ISK RWF

BBD JMD SAR

BDT JPY SBD

BGN KES SCR

BIF KGS SEK

BMD KHR SGD

BND KMF SHP

BOB KRW SLL

BRL KYD SRD

BSD KZT STD

BWP LAK SZL

BZD LBP THB

CAD LKR TJS

CDF LRD TOP

CHF LSL TRY

CLP MAD TTD

CNY MDL TWD

COP MGA TZS

CRC MKD UAH

CVE MMK UGX

CZK MNT USD

DJF MOP UYU

DKK MUR UZS

DOP MVR VND

DZD MWK VUV

EGP MXN WST

ETB MYR XAF

EUR MZN XCD

FJD NAD XOF

FKP NGN XPF

GBP NIO YER

GEL NOK ZAR

GIP NPR ZMW

GMD NZD

GNF PAB

Which payment or checkout method falls under Shopify Payments?

The quick answer is that any transaction completed using Shopify Payments’ gateway and accelerated checkout falls under Shopify Payments. Shopify provided a comprehensive summary to illustrate:

Payment Method	Checkout Type	How the Customer Pays	Get Paid Through Shopify Payments
Shopify Payments	Payment gateway	Shopify Payments	✔
Shop Pay	Accelerated checkout	Shopify Payments	✔
Apple Pay	Accelerated checkout	Apple Pay	✔
Google Pay	Accelerated checkout	Google Pay	✔
Shop Pay Installments	Payment gateway	Shop Pay	✖
PayPal	Payment gateway	Using PayPal	✖
Amazon Pay	Payment gateway	Amazon Pay	✖

How do I resolve failed payouts?

Payouts fail because there is an issue with the bank account that you assigned to accept proceeds of your sales through Shopify Payments.

How will I know? You get an email from Shopify and a notification banner is displayed on your dashboard.
What happens to my funds? Your funds will be placed on hold until the issue with the bank is resolved
What should I do? First, check the error message on your payout page explaining why the payout failed. Then, note the recommendation included in the notice. If necessary, contact your bank to help resolve the issue. Otherwise, you can opt to replace/update the bank linked to Shopify Payments.
The issue is fixed; what’s next? Retry the payout by clicking on the option in the payouts page.

Bottom Line

There are many advantages to using Shopify Payments. Not only do merchants save by not having to pay Shopify a commission fee of 0.5%–2% per transaction, but they get tools to offer accelerated and buy-now-pay-later checkouts, customize international payment processing, set up fraud protection, manage chargebacks, and more. These features alone make Shopify a cost effective solution for online businesses of all sizes.

Visit Shopify