Shopify Payments Review: What You Need To Know About Shopify’s In-House Payment Processor

Pros

• Predictable flat-rate pricing
• No early termination fee
• All-in-one payments
• Good for eCommerce
• Multicurrency acceptance

Cons

• Sudden account terminations are possible
• Funding holds are common

Shopify Payments Overview

The Shopify eCommerce platform is one of our highest-rated shopping cart solutions, primarily because it provides an all-inclusive toolset to a broad range of merchants. For one relatively low monthly rate, you get Shopify’s hosting, security, administrative abilities, inventory management features, customer service features, social selling and shipping features, web design tools, an in-house accelerated checkout option, and more. Read our Shopify review to get the full picture.

With Shopify Payments, an integrated payment processor, you can take advantage of Shopify’s built-in payment processing features almost immediately, with no long application process required. You won’t have to integrate an outside provider when you use Shopify Payments, and Shopify waives its shopping cart transaction fees.

However, despite its convenience, Shopify Payments does have its flaws. Read our full Shopify Payments review to get a sense of the benefits as well as some of the more common complaints.

Shopify Payments Features & Services

Merchants who sign up for Shopify for their online selling can also elect to use Shopify’s in-house credit card processor, Shopify Payments. Shopify Payments is made possible through a partnership with Stripe and is now available in addition to around 100 alternative third-party gateways (such as PayPal).

While using Shopify as your payment processor is very convenient for Shopify merchants, it comes with some drawbacks. The biggest shortcoming is the inherent account instability that comes with a payment service provider (PSP). This designation includes PayPal, Square, Shopify Payments, and Stripe (the back-end processor for Shopify Payments). Also called third-party processors or aggregators, these PSPs frequently accept merchants before officially reviewing them for eligibility. Then, when these PSPs do review merchants — and find them ineligible for service — they place holds on funds and even terminate non-compliant accounts without warning. The best way to avoid this risk is to read up on a PSP’s terms of service and acceptable use policy before signing up.

Despite the potential instability, PSPs make payment processing more accessible to new and low-volume businesses that would otherwise find it difficult to be approved for a merchant account. Just remember to follow the guidelines and be honest about your business model. Keeping your chargebacks to a minimum also helps prevent funding holds or an automatic reserve. Check out our post, Friendly Fraud Survival Guide: How Small Businesses Can Reduce Their Chargebacks & Save Money.

The last potential downside won’t affect most of our readers — Shopify Payment’s limited availability. Shopify Payments is only available to Shopify users based in select countries, including the US, the UK, Canada, and Australia (see Shopify’s full list of eligible countries). Furthermore, Shopify Payments is not suitable for high-risk merchants.

That said, Shopify Payments is a very solid option for Shopify merchants who want a convenient omnichannel platform with room to grow — including accepting international currencies with automatic currency conversion.

What products and services can you expect from Shopify Payments? Let’s summarize its core product offerings.

Shopify Payment Processing Features

• Omnichannel Platform: Over the years, Shopify has evolved from an online-only service to a full omnichannel package. You can use Shopify’s multiple products and merchant services to set up a site and sell online and in-person. You don’t even need to set up a full online shop to sell on Facebook and Instagram with Shopify Lite.
• Shop Pay: Shop Pay is an accelerated eCommerce checkout solution that you can easily enable when you use Shopify Payments. Shop Pay allows customers to save their payment information for future purchases securely. Then, when customers return to purchase at any Shopify store (including yours), the checkout process goes by much faster, resulting in fewer abandoned carts for you. Read our full article on Shop Pay to learn more.
• Developer Tools: Shopify Payments provides API documentation and step-by-step guides.
• Security Features & PCI Compliance: Shopify Payments is PCI compliant, and there are no additional fees related to compliance. Also, users of Shopify Payments get access to 3D Secure Checkout, which reduces fraudulent purchases by requiring customers to verify their identities.
• Chargeback Management: When you are issued a chargeback, Shopify will compile evidence and send it to the bank on your behalf. Shopify’s fraud analysis features should also hopefully reduce the number of chargebacks that you have to contest.
• Shopify Shipping: This built-in shipping suite provides tools to calculate real-time shipping rates, buy and print shipping labels, and track your shipments. Shopify Shipping is a somewhat new feature, and it’s free for all Shopify merchant accounts, but it is only available for orders shipped from the US and Canada.
• Checkout Options: Due to social distancing and other COVID-era constraints, Shopify updated the checkout flow experience so that you can offer what you need to stay safe and still sell to your customers. While this feature is technically separate from the payment screen and Shopify Payments specifically, we’ve included these updated features here for your knowledge:
  • Local & Curbside Pickup: Merchants can now allow options in the checkout for picking up orders in-store, curbside, or from any other location. Additionally, notifications on the updated Shopify POS app let you see when a buyer has arrived for curbside pickup.
  • Local Delivery: In all countries, merchants will soon be able to define their local delivery area by zip code and postal code or by radius. This update also lets you add local delivery fees and minimum order amounts for delivery.

Shopify Payments Hardware & Equipment

• Shopify POS: Shopify’s point of sale system allows you to process in-person transactions on a mobile device or a tablet, and it syncs inventory information between your online and brick-and-mortar stores. Read our full Shopify POS review for more.
• Shopify Card Readers & Accessories: You can purchase one of Shopify’s proprietary chip readers, including the following: Tap & Chip Reader ($49) with an optional dock ($39) or case ($19) and the Chip & Swipe Reader ($29). Shopify’s countertop solutions include a Retail Kit, which combines the Retail Stand, Tap and Chip Card Reader, and accessories. These can also be purchased separately. Additional hardware accessories include compatible barcode scanners, printers, cash drawers, and more.
• Hardware Rentals: Shopify partners with Fello to offer hardware rentals. Available hardware includes tablets, tablet stands, card readers, barcode scanners, cash drawers, and receipt printers.

These products and services are a great asset for many sellers, especially those who use Shopify to sell across multiple channels. Being such a feature-rich solution, Shopify earns an excellent rating in the Features & Services category.

Read our article on how to use Shopify for a deeper look at exactly how Shopify works.

Fees & Rates

There are two main financial advantages to using Shopify Payments in conjunction with Shopify:

1. No Shopify Transaction Fee: Shopify will waive the 0.5%-2.0% commission it would otherwise charge on each of your sales. Plus, if you do use Shopify Payments, you can also use PayPal Express without incurring Shopify’s transaction fees. Depending on which option your customer uses to check out, you’ll just pay the Shopify Payments or PayPal transaction fees.
2. Discounted Payment Processing: Most flat-rate credit card processors charge 2.9% + $0.30 per eCommerce sale. Shopify Payments charges this standard processing rate for users on the Lite and Basic subscriptions. However, Shopify’s credit card processing rate decreases for users on the Shopify ($79/month) and Shopify Advanced ($299/month) plans.

For your reference, here’s a breakdown of the four main plans for Shopify’s payments fees and rates:

Shopify Plus (Enterprise)

Merchants earning over a million eCommerce dollars per year are eligible for the Shopify Plus enterprise plan. While the standard rate for Shopify Plus is $2,000/month, rates are negotiable, so you’ll need to contact Shopify for special pricing. Check out our full review of Shopify Plus.

Additional Fees

Like all payment processors, Shopify Payments charges a flat-rate fee for each chargeback that customers issue. The amount of this fee varies by country. In the US, it’s $15, which is the industry average (see Shopify’s full list of chargeback fees by country). Shopify states that if the chargeback resolves in your favor, you get this chargeback fee refunded to you.

Except for the chargeback fee, Shopify does not charge any additional monthly fees, payment security fees, hidden fees, or setup fees on its payments service. Shopify offers excellent value and a pricing structure that provides flexibility and growth, which earns it an excellent rating in this category.

For an even more in-depth look at Shopify pricing, read our complete Shopify fees and pricing guide.

Sales & Advertising Transparency

Shopify Payments does a great job in terms of sales and advertising transparency. You’ll find all pricing information for rates and fees clearly on the website, and users haven’t reported any bait-and-switch tactics or shady sales gimmicks listed online.

Contract Length & Early Termination Fee

With Shopify Payments, there are no long-term contracts to sign. You pay per transaction, and you can cancel at any time. Since there is no contract, there is no early termination fee (ETF).

Shopify Payments, like other merchant account providers, can terminate your account at any time if you violate its Terms of Service. However, if it does terminate your Shopify Payments account, that does not necessarily mean your online store account will be terminated as well. The Shopify Payments Terms of Service (for US merchants) states: “Termination of this Agreement will not necessarily terminate your Shopify Platform Terms unless Shopify determines otherwise.”

If your Shopify Payments account is terminated but not your Shopify store, you’ll have to pay Shopify’s 0.5%-2.0% transaction fee when you find another processor.

Because Shopify Payments has no binding contract or ETF, the service gets an excellent rating in this category. However, you should indeed read the Shopify Payments TOS (especially the Prohibited Businesses section) to understand exactly what can cause your account to be terminated or your funds held.

Customer Service & Technical Support

Shopify keeps all of its customer service and technical support in-house, including support for Shopify Payments. You can contact support 24/7 via phone, live chat, or email. When I called in with a question, I reached a knowledgeable representative within three minutes.

Here’s a quick breakdown of Shopify Payments’ support options:

• Phone Support & Live Chat: Shopify offers both live chat and phone support, which will help you contact a Shopify representative with general knowledge. They may escalate your issue to the Shopify Billing department, which will respond via email.
• Online Knowledgebase: Shopify has dedicated a full section of its knowledgebase to payments. You can find answers to many of your questions within these resources. Having used this database to look for an answer to a question I had, I found my answer in only a few seconds.
• Email Support: Reach Shopify gurus or the Shopify Billing department via email.
• User Forum: Shopify has an active user forum. Use this forum to ask questions to fellow merchants. Occasionally, Shopify representatives also respond to questions on the forum.

Reviews are mixed on the quality of Shopify’s customer service. Some users have excellent experiences, while others do not. That said, we have found Shopify representatives to be informed and prompt in their responses and the knowledgebase robust. Additionally, we don’t see a pattern of customer service issues in user reviews and are giving Shopify a good rating in the customer service and technical support category.

User Reviews

Here at Merchant Maverick, we read as many user reviews as possible when researching a payment processor. The challenge with Shopify Payments is that while reviews of Shopify are plentiful, reviews of Shopify Payments, in particular, are much rarer. For this reason, and because you’ll be using Shopify Payments with Shopify (unless you use Shopify Lite to add buy buttons to a store on another platform), we’re providing reviews for the Shopify platform as a whole.

Here’s what users think on some of the major consumer review sites:

• G2 Consumer Reviews: 4.3/5 stars with 3,622 reviewers
• Better Business Bureau: A+ rating from the BBB with 1/5-star rating (Keep in mind that users of the BBB are typically coming with complaints in mind!)
• Apple Store: 4.6/5 stars with 7,081 reviews
• Capterra: 4.5/5 stars with 3,845 reviews

Negative Reviews & Complaints

Here are some of the issues we spotted among negative reviews:

• Ineligibility: Some merchants complain that they are not eligible for Shopify Payments. For some, this is because Shopify Payments is not available in their country. In other cases, Shopify has revoked payment services because the business was deemed “high-risk.”
• Shopify Holds Funds: Merchants frequently complain about their funds being withheld in a reserve, but this is standard practice if an account has an elevated chargeback risk. Here’s what Shopify Payments’ Terms of Service says: “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 or anticipated excessive Chargebacks or refunds, or other suspicious activity associated with your use of the Service or if required by law or court order.” Funding holds are common with Stripe and other third-party processors, but they happen with traditional merchant accounts, too. We recommend checking out our guide to avoiding holds and freezes.
• Add-Ons Can Increase Costs: Some merchants have noted that they needed additional apps to get the functionality they required from their Shopify store and that this can easily drive your costs higher.
• Not As Flexible As Some Solutions: Some users have noted what one Capterra reviewer has picked up on: “Shopify is not nearly as flexible as something like WooCommerce or Magento because you don’t have access to the server’s backend code or the database.” However, while this will negatively impact a small proportion of sellers, most merchants will benefit from not having to be in charge of maintaining the server and database.

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.

Positive Reviews & Testimonials

Customers choose Shopify Payments for many reasons, and among the major review sites, the positive reviews comprise the majority. Praise for Shopify includes:

• No Shopify Transaction Fees: While there will always be processing fees when you use Shopify Payments, you no longer have to pay the extra 0.5%-2.0% Shopify transaction fee associated with your Shopify plan.
• Potentially Lower Processing Fees: As I’ve said before, higher-level Shopify merchants benefit from lower rates. You may find that Shopify’s credit card processing fees are competitive with those of other major processors.
• Ease Of Use: Customers like how easy it is to take payments. No technical skills (e.g., coding) are needed to get an eCommerce site up and start selling. You won’t need any developers to connect with Shopify Payments, and payment management seamlessly integrates into your admin panel. Moreover, most merchants enjoy not having to be responsible for server maintenance and the like. As another Capterra reviewer notes, “I work with a lot of websites that are ecommerce-based, and the headaches you’d expect to come with complex ecosystems are so much less frequent with Shopify than they are with Magento, BigCommerce, etc.”

Shopify Payments is a great solution if you meet the requirements and are looking for a processor that’s easy to integrate. Because most users are happy with Shopify and offer consistent praise, we’re giving Shopify a good rating in the user review category.

Final Verdict

If you’ve read through this review and are still wondering whether to use Shopify Payments as your payment processor, my answer would be that it’s a top-notch provider that suits a wide variety of eCommerce businesses, which is why we’re giving it 4.5 out of 5 stars. However, it’s not for everybody.

While it doesn’t happen to the vast majority of accounts, we’ve seen enough reports of merchants getting their accounts terminated by Shopify Payments to know that it does happen. As you make your decision, read every word of Shopify Payments’ Terms of Service to ensure your business complies with the rules.

If you have even the tiniest inkling of doubt about whether your business qualifies, speak with the risk department directly before signing up. It’s better to be completely honest about your business from the get-go than to fudge the details and hope it will all work out.

For most merchants, Shopify offers incredible value. The platform allows for a lot of flexibility and provides even more cost-efficiency when it comes time to scale up. You’ll have all the tools you need to start selling on your site or outside marketplaces and social media channels. If you decide that Shopify is for you, read our article How To Set Up Your Shopify Store & Start Selling On Shopify for a helpful guide to getting started.

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. If not, check out our post on the top Shopify alternatives and competitors for more options!

If you have experience with Shopify Payments or have questions about Shopify in general, please leave us a comment! We’d love to hear from you!

The Merchant Maverick Seal of Approval 🏆

Shopify Payments	Visit Site

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Shopify Payments for yourself.

The Merchant Maverick Seal of Approval 🏆

Shopify Payments	Visit Site

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see Shopify Payments for yourself.

Sources

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