2022 Shopify Payments Review: Is It Right for You?
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
Anna’s experience in business and finance led her to work for a US risk mitigation company in Singapore. She has contributed to POS and payments topics in the Retail section across Fit Small Business.
This article is part of a larger series on Retail Management.
Shopify Payments is a payment processing service exclusive to Shopify merchants. It is a built-in payment gateway available to Shopify users automatically once they sign up for a merchant account successfully on Shopify’s ecommerce platform at no extra cost. Features include invoicing, card-on-file payment processing, omnichannel sales, chargeback management, and payment tracking.
With Stripe as its back-end payment processor, Shopify Payments offers the highest credit card processing security that Stripe is known for, including enhanced fraud analysis checks and 3D secure checkout in all Shopify plans. Shopify Payments provides discounted flat-rate pricing as low as 2.4% per transaction with a 14-day free trial for its ecommerce platform.
Shopify Payments
What We Like
- Easy signup
- Fully integrated with Shopify platform
- Shop Pay one-click checkout
- Waived Shopify commission per transaction
What's Missing
- Chargeback protection for a fee
- Not available for other ecommerce platforms (Shopify account required)
- Complaints of account holds and reserves
Deciding Factors
- Monthly fee: $9 to $299 (Shopify Lite and regular Shopify merchant account)
- In-person transaction: 2.4% to 2.7%
- Online transaction: 2.4% + 30 cents to 2.9% + 30 cents
- Invoice processing: 2.4% + 30 cents to 2.9% + 30 cents
- Chargeback fee: Varies
- Currency conversion fee: Custom
- Contract term: Month-to-month
- Deposit speed: Next business day
- Withholds part of funds as reserve
- Hardware: From $19
- Can process multicurrency transactions
- 14-day free trial
When to Use Shopify Payments
As a front-end payment service, Shopify Payments is among the most affordable merchant services providers with no long-term contracts and simple, discounted, flat-rate transaction fees. Because Shopify is the standard for omnichannel and ecommerce point-of-sale (POS) solutions, it is no surprise that Shopify Payments is also the most ideal integrated payment processor for small ecommerce retail businesses selling on Shopify.
However, because Shopify Payments is only available to Shopify sellers, it did not make the cut in our evaluation of the best merchant services for small businesses.
In particular, Shopify Payments is best for:
- Retail businesses using Shopify: Every Shopify account comes with a free Shopify Payments service that allows you to accept all popular credit card and digital wallet payments.
- Existing ecommerce businesses looking to accept in-person payments: Shopify Lite offers multichannel sales tools and mobile POS hardware for online businesses that don’t need a website. It also comes with a Shopify Admin feature to manage your products, customers, and payments.
- Ecommerce businesses wanting to use Stripe’s online payment features: Stripe is one of the most secure and popular payment processors for growing ecommerce businesses. However, using Stripe usually requires some technical expertise. Shopify allows you to process payments through Stripe with Shopify’s easy-to-use platform. Because it’s fully integrated, there are no extra steps required to start accepting payments.
Overall, Shopify is our top-recommended ecommerce platform and multichannel POS system.
When to Use an Alternative
- Operating a high-risk business: Shopify Payments is not available for businesses that are considered high-risk or prohibited by the Payment Network and Stripe’s Financial Services Provider. Consider applying for a merchant account that specializes in high-risk businesses. Check out our recommended high-risk merchant account providers.
- New businesses looking for a free merchant account: While Shopify Payments is built in to every Shopify merchant account at no extra charge, you will need to have a Shopify account that would cost you at least $9 a month. If you prefer not to pay a monthly fee, consider our top free merchant accounts providers.
- Businesses not compatible with Shopify: Shopify Payments is only available to Shopify merchants. If you need strong offline payment processing features, or you are a nonretail or a hybrid retailer dealing with food and beverage, you may want to consider another payment processor that works without Shopify. Consider our list of top mobile POS providers and payment gateways.
Shopify Payments Alternatives & Fees Comparison
 |  |  | |
|---|---|---|---|
Best For | Businesses that need a complete online payment solution | Individuals that require a reliable solution for occasional payments | Businesses that need integrations and versatility |
Monthly Fee | $25 | $0 to $30 | $0 |
Card Present | 2.9% + 30 cents or 10 cents per transaction and 10 cents batch fee | 2.29% + 9 cents | 2.7% + 5 cents |
Card Not Present (CNP) | 2.9% + 30 cents or 10 cents per transaction and 10 cents batch fee | 2.59% + 49 cents | 2.9% + 30 cents |
Chargeback Fee | From $0 | $0 to $20 | $15 |
All these alternatives are payment gateways that also work with Shopify. However, note that Shopify will charge you a commission fee of 0.5% to 2% per transaction (depending on your chosen Shopify plan) for not using Shopify Payments.
Shopify Payments Fee Calculator
Enter your current in-store and/or online sales volumes and average order values for an estimate on the monthly fees you would pay using Shopify Payments.
Shopify Payments Pricing
Shopify Payments offers simple, discounted flat rate transaction fees―lower rates for the more expensive monthly Shopify plan―and comes free of charge and built into each Shopify merchant account. So, while there’s no monthly fee for using Shopify Payments, you still need to choose and pay for a monthly Shopify subscription.
You can opt to use a different payment service, but the best thing about using Shopify Payments is that you no longer have to pay Shopify its commission fee for every transaction.
Shopify Plans
Shopify Plan | Monthly Fee for Shopify Plan | Online Transactions | In-person Transactions | Waived Shopify Commission Fee |
|---|---|---|---|---|
Lite | $9 | 2.9% + 30 cents | 2.7% | 2.0% |
Basic | $29 | 2.9% + 30 cents | 2.7% | 2.0% |
Shopify | $79 | 2.6% + 30 cents | 2.5% | 1.0% |
Advanced | $299 | 2.4% + 30 cents | 2.4% | 0.5% |
All Shopify Plans except Shopify Lite offer full ecommerce features. Shopify Lite is for merchants that already have an existing ecommerce website and only require shareable payment links and in-person payment tools.
Learn more about Shopify’s pricing and plan options.
Shopify Payments Hardware
Shopify Payments comes with the ability to process in-person payments through a mobile device. Card readers are sold directly from Shopify that all come with free shipping, 30-day returns, and one-year warranty.
Chip and Swipe Reader | Tap and Chip Reader | Chipper 2X BT Reader |
|---|---|---|
 |  |  |
$29 | $49 | $49 |
Best for in-store mobile payment | Best for mobile payments on iOS and Android | Best for mobile payments on iOS device |
Shopify Payments Features
Setup & Application
Signing up for a Shopify account automatically provides you with a Shopify Payments service, so there is no separate set of steps required to start accepting payments. You only need to submit your business documentations once, which will be used to approve you for opening a Shopify online store and payment processing.
You can start accepting payments once you have signed up successfully for a Shopify account and launched your online store. However, expect that your funds will be placed on hold until you pass the verification process, which takes up to three business days.
Shopify will require the following information to be approved for a Shopify Payments service:
- Proof of identity
- Proof of home address
- Proof of business (may include financial statements, business invoices, and reseller authorization or distributor information)
- Website information
When filling in the merchant application form:
- Under business details: Choose the business type and provide your business number (BN), employer identification number (EIN), or taxpayer identification number (TIN)
- For the address details: Make sure that you provide the same address listed on your business documents
Shopify states that users must complete the setup of their Shopify Payments account, including adding banking information, within 21 (not business) days of their first sale. Otherwise, all payments are refunded to the buyer automatically.
Contract & Terms of Service
To understand Shopify Payments’ terms and conditions, we need to look at both the Shopify Payments Terms of Service (TOS) and Stripe Connected Account Agreement, which stands as a separate agreement between Stripe and the merchant.
Right away, the Shopify Terms of Service clarifies that using Shopify Payments binds you automatically to an agreement with Stripe’s Connected service. This means that Shopify will have no control or obligation should Stripe cancel your payment service other than to notify you and offer you a different payment gateway (which will include add-on per-transaction fees). The document also specifies that it is Stripe that collects the fees on Shopify’s behalf, and either Shopify or Stripe may restrict you from accepting certain types of card brands without prior notice.
In addition, while Stripe provides you with advanced fraud management features, Shopify will still require you to submit documentation proof of your compliance with Payment Card Industry Data Security Standard (PCI-DSS) and/or Payment Application DSS (PA-DSS) upon request. You also agree that Shopify may set up a reserve of your funds―with terms that they see fit―to cover chargeback and refunds. The TOS also indicates that you allow Shopify to charge you a fee for mediating or investigating chargeback disputes.
Meanwhile, a closer look at the Stripe Connected Account Agreement shows that you may choose to discontinue the use of Stripe as your payment processor and, by default, terminate your use of Shopify Payments. It is crucial that you raise any questions you may have regarding these terms with a Shopify Payments representative before using this service.
Ecommerce Checkout
Shopify Payments provides you with the versatile ecommerce checkout features users get with a Shopify account. Apart from having the tools to create your very own ecommerce store complete with a website, it also gives you the ability to design checkout options for any type of online platform. This includes email carts, “Buy Now” buttons, quick response (QR) codes, and shareable links.
Additionally, Shopify also offers PayPal Express Checkout as one of its default payment alternatives. For the tech-savvy, a JavaScript Buy SDK (software development kit) helps you create a highly customized, branded online store and checkout on any website, online marketplace, or social media platform.
With Shopify Payments, you can add “Buy Now” buttons to any website.
(Source: Shopify)
Shop Pay
Launched in 2017, Shop Pay is Shopify’s accelerated checkout feature that allows your customers to sign up and securely store their payment information for future transactions. It also lets you offer customers buy-now, pay-later options on their purchases. Note, however, that using this service includes higher processing rates of around 5.9% plus 30 cents per transaction. Shop Pay is available for every Shopify merchant account and helps you set up an easy-to-use interface for your customers. It also provides end-to-end encryption of all your accepted payments through Shopify’s PCI-compliant servers.
Shop Pay is also available to Shopify merchants selling on social media and even on Google.
(Source: Shopify)
Draft Orders, Subscriptions & Invoicing
Invoicing is available for Shopify users who accept over-the-phone purchases and sell products wholesale or by subscription. You can create draft orders for your customers when you receive a notice of intent to purchase your products over the phone, in person, via email, or remotely from anywhere. These draft orders are then sent to customers in an invoice where customers can click a link to complete their purchase. Shopify Payments lets you customize your invoice by adding itemized product descriptions, discounts, taxes, shipping specifications, and payment terms. It also allows you to create a customer profile while creating the invoice.
Shopify Payments allows you to offer subscription options even from the checkout page.
(Source: Shopify)
Mobile App
Shop is Shopify’s mobile app solution that allows your customers to purchase your products from a mobile application. It offers local filters to identify local businesses currently offering certain sales features, such as shipping, pick-up, and return policies, accelerated checkout using Shop Pay, package tracking, and personalized customer recommendations. It is available for both iOS and Android mobile devices.
The Shop app is easy to use and set up, from syncing product information to managing payment options with Shopify Payments.
(Source: Shopify)
Multicurrency Transactions
With Shopify Payments, businesses that sell globally have the ability to sell in multiple currencies and receive payments in their local currency. This means that customers can view your products at local prices based on their location. You also have the ability to manage the currencies available for your customers from the time they view your product until they reach checkout.
Note: This feature is only available for higher Shopify plan users.
Fraud & Risk Management
Fraud Protect is Shopify Payments’ fraud and risk management feature, which you can assign per transaction for a specific fee. This provides your small business with guaranteed protection against fraudulent sales, covers you from any incidental fees arising from chargebacks, and manages the chargeback process on your behalf.
For larger businesses, this service includes an additional function that streamlines your order fulfillment process by monitoring each sale and providing you with notifications on every protected transaction from your Shopify dashboard.
Shopify Payments Ease of Use
Easy Account Setup
Shopify Payments is set up automatically with your Shopify account. Because there are no long-term contracts, you can also elect to discontinue your use of Shopify Payments manually. However, this would mean you need to choose an alternative payment processor compatible with Shopify, which would cost an additional fee per transaction.
Integrations
As an ecommerce solution, Shopify in itself provides a wide range of integrations, so you can expect the same level of versatility with its payment processing service. While Shopify Payments only works within the Shopify ecosystem, it can be configured easily to integrate with a number of checkout solutions such as cart modification, cross-selling and upselling, and pickup and delivery apps.
Fast Payouts
Shopify Payments sends your funds to your bank account on the next business day. However, you can also configure your settings to have the proceeds of your sales deposited at intervals of your choice. You also get a report of your payout schedule from your Shopify dashboard.
Customer Support
You can find an extensive guide on how to use Shopify Payments in Shopify’s help center. It also includes a number of video tutorials and tips for setting up and using the feature. As for customer support, Shopify’s customer service is available 24/7 via phone, email, and chat. You can also find fast solutions for your Shopify Payment concerns within its active seller community forum.
What Users Think of Shopify Payments
There are no available user reviews exclusively for Shopify Payments, but you’ll find a number of comments about its payment processing service included in Shopify reviews for both the ecommerce platform and POS front. You can find this in our reviews of Shopify ecommerce platform and Shopify POS.
Most notable user feedback about Shopify Payments are as follows:
Customers Like | Customer Complaints |
|---|---|
Accepts PayPal payments | Payment issues/fund holds |
International payment methods | Multicurrency is limited to certain countries |
Comprehensive knowledge base | Additional fee for not using Shopify Payments |
Bottom Line
If you are a Shopify user, having Shopify Payments as a payment processing service makes the most sense. It combines the advanced security and payment processing features of Stripe, with Shopify’s multichannel and multicurrency ecommerce solutions at no extra cost. You get discounted flat-rate transaction fees, and while there are monthly fees for maintaining a Shopify account, the subscription plan options can match the scale of any growing online business. Try Shopify Payments today with a 14-day free trial.
