Shopify (Payments) Payment Gateway Review
Shopify is one of the largest and most popular online shopping carts and e-commerce platforms, with over 500,000 merchants globally.
If you’re trying to set up a Shopify business, or need a new payment gateway, accepting payments online is a huge part of setting up an online store.
You are in charge of setting up your own merchant account and checkout page, so customers can actually make a purchase from your store. Shopify Payments is an ideal solution if you’re using Shopify.
So let’s fire up the Shopify payments review now:
Shopify Payments became available in the UK in 2014, offering a native Shopify payment gateway to sellers on the platform and on their own websites. However, it’s just one of about 40 solutions available to sellers in the UK, and it competes with big names like PayPal, SagePay, and Worldpay. If you’re looking for an online payment gateway for Shopify, it probably is one of your top choices, just because it’s native to the platform. However, you should still check rates, understand what you’re getting into, and compare the service with all your other options to ensure you’re getting the best deal.
- Payment processing ranging from 1.8%-2.4% + 20p
- Natively integration for Shopify
- No need to set up a merchant account with third-party processing by Stripe
- Shopify POS available for Face-to-Face sales
Shopify Payments is just one of the payment gateway solutions available to you, but with lower pricing than some other solutions, native integration, and a supported tablet-based point of sale terminal, it has a lot to offer.
Shopify Payment Gateway Costs
Shopify Payments is available as part of your Shopify subscription, with rates based on subscription options.
|POS for Retail||£49||£49||£49|
|In Person||2.2% + 20p||1.9% + 20p||1.6% + 20p|
|Online Payments (Shopify)||1.7%||1.6%||1.5%|
|Online Payments (External Gateway)||+2%||+1%||+0.5%|
Shopify’s fee structure has both advantages and disadvantages. First, you will not pay any additional fees such as bandwidth fees, minimum monthly charges, paper statement charges, etc. Second, at a minimum monthly rate of £29, Shopify is more expensive than other solutions like SagePay, which start at lower rates. However, because Shopify charges these costs whether you use the payment gateway or not, you actually save a great deal of money using the Shopify payment gateway over paying for a third-party solution if you’re selling on Shopify anyway.
Finally, with flat rate pricing at 2.2% + 20p, you pay more for debit cards than you would with a solution that offers a flat pence rate per debit card (Typically 20p-40p). However, many online purchases are made with credit card, so if a large volume of your sales are made with credit, you won’t see enough of a difference on your bill to make a switch worthwhile.
Contract Costs – Shopify offers a standard monthly contract, which auto-renews every 30 days. You can also choose to sign up for 12 or 24 months for a 10% or 20% discount on rates. However, if you choose to cancel, you will have to buy your way out of the contract.
Chargebacks – Shopify charges a flat rate chargeback fee of £15, which compares well with some other options, who offer average fees between £12 and £30.
Shopify Payments is powered by Stripe, but what is Stripe?
Stripe vs. Shopify Payments
Stripe is a third-party payment processor, like PayPal. The company operates out of the United States and provides online payment processing, payment accounts, and one-click payment solutions to cardholders. Stripe also offers an online payment gateway for card processing from their own site.
Stripe also uses very simple flat-rate pricing with no monthly or hidden fees:
|Card Type||Transaction Cost||With Basic||With Professional||With Unlimited|
|European||1.4% + 20p||3.4% + 20||2.4% + 20p||1.9% + 20p|
|Non-European||2.9% + 20p||4.9% + 20p||3.9% + 20p||3.3% + 20p|
While Stripe is initially cheaper than Shopify, you also have to consider Shopify’s added fees. With these in mind, choosing Shopify Payments powered by Stripe is significantly cheaper, especially if you frequently accept international payments.
Shopify Payment Gateway Offerings
The Shopify payment gateway includes multiple features, starting with all Shopify features. You also get several additional payment gateway features:
|Manual order creation||Yes||Yes||Yes|
|Website and blog||Yes||Yes||Yes|
|Gift card Support||No||Yes||Yes|
|Abandoned cart recovery||No||Yes||Yes|
|Third-party calculated shipping rates||No||No||Yes|
All options also come with a Buy Button, which you can integrate into nearly any website to offer checkout.
Multiple Currency Checkout – Shopify supports multiple currency checkout, enabling you to accept payments in most major currencies. With Dynamic Currency Conversion, your shopping cart can recognise the shopper’s location and auto-convert pricing into their local currency. This can help you to increase conversions for international sales.
Facebook Sales – Shopify Lite costs £9 per month and enables you to create a Facebook store with checkout and payments. Shopify Lite offers the same transaction costs as Shopify Payments.
The Shopify POS is a tablet-based point of sale system which costs £49 per month for the tablet ePoS and software with card reader, scanner, and printer. This enables you to accept payments in-person and automatically synchronise sales with your Shopify ePoS. You can also manage all in-store inventory through the Shopify Dashboard, to automatically update online inventory as you sell products face-to-face.
Online Payment Management
Shopify’s online payment management dashboard makes it easy to manage your account and details. You can view transactions, check costs, create manual orders, and dispute chargebacks with one click. All accounts can also generate reports, but basic accounts can only create limited reports.
Shopify Payments Alternatives
UK users have access to 40 alternative payment gateways, which you can and should compare if you are looking for a Shopify payment gateway solution. The top 5 alternatives include Worldpay, SagePay, Realex, PayPal, Paymentsense, and Authorize.net. However, you should keep in mind that if you choose a non-Shopify solution, you will pay the additional fees on top of your chosen payment gateway fees.
|Payment Gateway||Monthly Fee||Transaction Costs||With Basic||With Professional||With Unlimited|
|Worldpay||£19.95||2.75% credit/0.75% debit|
|SagePay||£0||1.4% + 20p||3.4% + 20||2.4% + 20p||1.9% + 20p|
|Realex||£29||1.75% + 9p||3.75% + 9p||2.75% + 9p||2.25% + 9p|
|PayPal||£20||1.9% + 20p – 3.4% + 20p||3.9% + 20p – 5.4% + 20p||2.9% + 20p – 4.4% + 20p||2.4% + 20p – 4.1% + 20p|
|PaymentSense||£9.95-£19.95||2.5% credit / 30p debit|
4.5% credit /
2% + 30p debit
1% + 30p debit
0.5% + 30p debit
|Authorize.Net||£25||2.9% + 30p||4.9% + 30p||3.9% + 30p||3.4% + 30p|
In each case, it is significantly cheaper to go with Shopify Payments rather than choosing another payment gateway provider. The added processing fees basically makes most of Shopify’s competitors too expensive, especially considering that you will be paying Shopify’s account fee on top of the payment gateway fee from another provider. Most additional providers also charge costs such as PCI compliance and monthly statement fees, which Shopify does not charge.
So, choosing Shopify Payments can save you a great deal per transaction no matter which payment gateway and account option you are considering.
What About Customer Service
Shopify offers 24/7 live support via email, phone, and chat, which are available in the UK. Shopify provides trained customer service, “Shopify Gurus”, who can help with technical and contract questions. Unfortunately, quality and knowledgeability does vary between support representatives.
However, you can always get in touch with a Shopify customer service representative and Shopify does typically resolve issues including hardware failure fairly quickly. The company takes longer to process fee and transaction related complaints, but based on customer reviews, most are eventually resolved.
How is Shopify’s Reputation?
Shopify has a limited number of online reviews, most of which are positive. However, with over 500,000 users, the limited number of negative reviews regarding the store are not as bad as they might seem. Most negative reviews surround:
- Limited Functionality – Using the Shopify app as a store often means adding on additional plugins, which will increase the cost.
- Freezing or Holding Funds – Shopify sometimes freezes or holds funds for security checks. This can severely interfere with cashflow for very small businesses. If you intend to use Shopify at all, even with another payment gateway, make sure that you completely set up security and verify your identification and business before accepting payments.
- Unexpected Charges – Shopify actually has significantly fewer complaints regarding unexpected charges and fees than any other payment gateway, which is a good sign. However, if you have an account with any payment service, you will likely face occasional unexpected fees and charges. Try to contact customer service to request more information about possible fees before setting up the service if you’re concerned.
- Chargeback Fees – Most Shopify users are very small businesses, and a £15 chargeback fee can seem very high. However, it is actually lower than the industry standard, which can range as high as £30. A chargeback happens when a customer disputes a transaction, you can dispute the chargeback, but if the customer wins, you owe them the cost of the purchase + the fee. You also do not typically get the product back. Chargebacks are designed to protect consumers from fraud, but you can dispute them to prevent people from scamming you.
- Difficulty Cancelling – While Shopify’s standard payment gateway service is available with a monthly contract (no contract), you can choose to sign up for 1 or even 2 years. If you do so, you will be unable to cancel the contract.
Shopify Payments Review
- Ease of use
Shopify offers a strong online payment gateway solution, catering specifically for its own users. If you’re using or intend to sell with Shopify, their own gateway makes the most sense. However, Shopify does use pressure tactics to get you to use their service by adding a transaction fee to purchases made through third-party payment gateways.
With 2% – 0.5% tacked onto any processing fees offered by another company, Shopify’s solution will always be the cheapest if you’re selling through their shopping cart. However, with rates starting at 1.7% for online payments, Shopify Payments is very competitive.
You can also save on monthly costs because Shopify includes Payment Gateway as part of their basic subscription. You won’t pay minimum monthly charges, reporting fees, or setup fees because Shopify doesn’t have them.
If you’re looking for a payment gateway to use outside of Shopify, there are plenty of more cost-effective solutions that won’t’ require you to sign up for Shopify. For example, both SagePay and Stripe offer lower transaction rates and monthly fees.
If you’re using Shopify, the company’s payment gateway is the only solution that makes sense. Luckily, it’s also priced very well, offers good security and fraud protection, and is powered by one of the largest payment processors on the web.