If you’ve spent any time on our blog, you know that Shopify (read our review) is one of our favorite shopping cart solutions, primarily because they provide an all-inclusive solution to a wide range of merchants. One monthly rate gives you access to Shopify’s hosting, security, administrative abilities, customer service features, inventory management features, web design tools, and more.
With the addition of Shopify Payments, an integrated payment processor, you can even access built-in payment processing features. Shopify Payments allows you to quickly begin accepting orders on your online store. You won’t have to worry about integrating a third-party processor, and Shopify will waive their shopping cart transaction fees.
However, despite its convenience, Shopify Payments is not a perfect solution. Customers often complain that they do not qualify to use the service. Others say that Shopify Payments has frozen their account or is holding payments.
Keep reading to learn if you qualify for Shopify Payments and if it’s right for your business.
In this article, we’ll be discussing payment service providers (PSPs). If you’re new to the world of payment processing, we’d love to help get you oriented. Download our free ebook, The Beginner’s Guide to Payment Processing, to get started.
Table of Contents
What Is Shopify Payments?
Shopify Payments is a payment processor that allows you to accept customers’ money securely on your account. Shopify is responsible for these transactions, although they are effectively processed through Stripe and Wells Fargo.
Shopify Payments is already integrated into your Shopify account, so it requires very little setup. There is no need to integrate a third-party processor or coordinate payments with a separate company. All you have to do is select Shopify Payments in your admin and add your banking information. Read Shopify’s setup instructions.
What’s more, Shopify Payments comes with a few additional features, including chargeback management and fraud prevention.
When you use Shopify Payments, Shopify will waive their usual shopping cart transaction fees. The only transaction fees you’ll need to pay are those associated with payment processing.
What Are The Rates?
Every PSP comes with its own processing rates and fees. Shopify Payments bases their rates on users’ subscription level. Users on higher Shopify plans benefit from lower rates. Take a look at the screenshot below for a breakdown of those rates.
Shopify states that they do not charge any monthly fees, hidden fees, or setup fees on their payments service.
Who Can Use Shopify Payments?
Perhaps the most obvious requirement is that you must be a Shopify customer to use Shopify Payments.
Shopify Payments is only available to merchants in the US, Canada, the UK, Ireland, Australia, New Zealand, and Singapore. Shopify Payments is not available to US territories, with the exception of Puerto Rico.
You must follow Shopify’s Acceptable Use Policy. Take a look at the extensive list of products and services Shopify does not support below:
If you do not comply with Shopify Payments’ Terms of Service, you will not be approved or the service may be revoked.
When Do I Get Paid?
Payday is on everyone’s mind. One of the most frequently-asked questions regarding Shopify Payments is how long you’ll have to wait to receive your customers’ payments.
This period — the time between when a customer places an order and when those funds are sent to your bank account — is called a pay period. You should keep in mind that this pay period does not include the amount of time it takes for your bank to process that deposit after it’s sent (typically between 24-72 hours).
Your pay period with Shopify Payments will depend on the country in which your company is based. You can view the full breakdown of pay periods in Shopify’s knowledgebase, or you can see my summary below:
- US: 2 business days. Funds from Friday, Saturday, and Sunday are grouped and sent together as one payment.
- Canada: 3 business days. Funds from Friday, Saturday, and Sunday are grouped and sent together as one payment.
- Australia: 3 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.
- New Zealand: 3 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.
- UK & Ireland: 4 business days. Funds from Saturday, Sunday, and Monday are grouped and sent together as one payment.
Make sure you keep in mind this delay in payments as you plan your business. It might be worth setting up a business credit card so you always have funds on hand.
Pros & Positive Reviews
Customers choose Shopify Payments for a number of reasons. Here are the primary benefits of using Shopify Payments:
- No Shopify Transaction Fees: While there will always be processing fees, when you use Shopify Payments, you’ll no longer have to pay that 1%-2% transaction fee associated with your Shopify plan. I assume Shopify instead takes their money from your payment processing. Either way, it’s savings for you.
- Potentially Lower Processing Fees: As I’ve said before, higher-level Shopify merchants benefit from lower rates. You may find that Shopify’s rates are competitive with those of other major processors.
- Already Integrated: You won’t need any developers to connect with Shopify Payments.
- Integrated Fraud Prevention: Shopify Payments helps you reduce fraudulent transactions. You can choose to enable an address verification system and a card verification value upon checkout to ensure customers are real cardholders. Read more about fraud analysis.
Shopify Payments is a great solution if you meet the requirements and are looking for a processor that’s easy to integrate.
Cons & Complaints
While Shopify Payments is great for convenience, I’ve seen numerous reports blaming the service for being unreliable and difficult to contact. Here are a few of the most common complaints and disadvantages of using Shopify Payments:
- Ineligibility: Shopify users often complain that they are not eligible for Shopify Payments. For some, this is because Shopify Payments is not available in their country. In some cases, Shopify has actually revoked payment services because, for one reason or another, their business was deemed “high-risk.” Shopify’s Terms of Service states: “We reserve the right to modify or terminate the Service for any reason, without notice at any time.”
- Shopify Holds Funds: Merchants frequently complain of their funds being withheld for an extended period of time. Here’s what Shopify Payments’ Terms Of Service says about that: “Stripe, on behalf of Shopify and/or Wells Fargo reserves the right to change the Payout Schedule or suspend payouts to your Bank Account should we determine it is necessary due to pending disputes, excessive Chargebacks or refunds, or other suspicious activity associated with your use of the Service or it required by law or court order.”
- Difficulties With Chargebacks: Chargebacks are an unfortunate and inevitable part of running an online business. If customers file too many chargebacks against you, Shopify may withhold your funds, further complicating the issue.
Make sure you read the Terms of Service for every solution you sign up with, including Shopify and Shopify Payments. It could save you a world of pain.
I’ve seen enough negative reports about Shopify Payments to be skeptical of the service. Many merchants have been denied payments or had the service revoked entirely.
However, without the specifics, it’s difficult to determine whether Shopify was justified or not in these actions. If merchants were not complying with Shopify Payments’ Terms of Service, Shopify was within their rights to cancel the service.
As you make your decision, read every word of Shopify Payments’ Terms of Service to ensure your business qualifies. There are some great benefits to integrated payments, and if your store follows all the rules, Shopify Payments could be the best choice for your store.
But, don’t stop your research there. Take a look at our complete review of Shopify (and the real customer comments below) to learn more about the software, and be sure to read up on Shopify Payments in their knowledgebase. Best of luck!