How to Accept Payments with Shopify

Shopify has helped to revolutionise online retailing and enabled millions of people across the world to set up their own businesses.

The Canadian e-commerce giant provides the essential internet infrastructure for online shopkeepers to start making money.

But how can you receive payments through Shopify? What do you need in place to enable Shopify payment processing to be smooth and efficient.

Here we look at how to accept payments with Shopify online, including the Shopify payment methods that are available and the costs involved.

What Is Shopify?

Before we explore the various Shopify payment options, let’s remind ourselves of how Shopify works and what it offers to businesses.

The e-commerce platform enables even complete beginners to build an online store, manage sales, market to customers and accept payments.

Its tools are used by firms of all sizes around the world and are even trusted by global brands such as Heinz, Mattel, Gymshark and Netflix.

Shopify is also very successful. In fact, its revenue for the second quarter of 2024 came in at $2 billion, which represents year-over-year growth of around 25%.

According to Harvey Finkelstein, Shopify’s president, the company is becoming a “leading enabler” of global commerce and entrepreneurship.

“More and more merchants across the world are putting their trust in Shopify’s unified commerce operating system to fuel growth and simplify complex operations,” he said.

How Does Shopify Work?

Shopify is a secure, cloud-based and hosted platform that enables business owners to sell in multiple places and sync inventory and customer management.

Shopify merchants pay fees to access the platform's various products and services. For example, Shopify’s basic plan currently costs £19 per month.

However, there is a rising price tariff of up to £259 per month for an advanced package, as well as solutions for even more complicated businesses.

Tools include customisable themes, AI features to help write product descriptions and a popular one-click checkout.

Of course, the main reason for someone to set up an e-commerce site is to make money by selling goods and services to potential customers.

That’s why it’s essential for businesses to have an efficient and reliable payment system in place to ensure they get paid. Without this cash flow, they simply can’t survive.

With that in mind, let’s take a look at the various Shopify payment gateway options and how entrepreneurs can choose the best option for their needs.

How to Accept Payments with Shopify

All Shopify-supported payment methods rely on third party providers to process your transactions so it’s important to clarify exactly how they work.

For example, some might charge fees, while others may have strict rules in place concerning the type of products that can be sold.

Source: Shopify

Setting Up Subscriptions

You can set up subscriptions on the Shopify platform to enable customers to make scheduled purchases into the future.

The benefits of Shopify recurring payments from a business perspective is that this can be a constant source of revenue.

However, there are eligibility requirements. For example, an online store must be using one of a set number of payment gateways.

In addition, they will also need to have a subscription app installed. Once this is in place, a subscription policy can be added.

Shopify’s Default Payment Solution

The most obvious place to start is Shopify Payments. This is the native Shopify Payment gateway so counts as a default option for users.

You can also activate Shop Pay, which allows customers to save their shipping and payment information to help them check out faster in future.

So, what are the Shopify Payments requirements? There are a couple of things to bear in mind when debating whether this option is suitable.

• Shopify Payments is only available in certain countries and regions.
• You must set up two-step authentication to use this solution.
• Your business and products must not be on the prohibited list.

Of course, there are a few things to consider. Firstly, what are the Shopify Payments fees? These range from 2.4% to 2.9% of a purchase plus a flat transaction fee.

How about Shopify Payment countries? Well, it’s available in more than 20 countries, including the US, the UK, Japan, France, Germany and Singapore.

As far as how long you will have to wait to get paid, this is governed by what is known as the pay period. The length of time will vary depending on the country in which the shop is based.

The pay period refers to the length of time between the date that a customer's payment is captured and the date that your payout is sent to your bank account.

Third Party Payment Options

If you're not eligible for Shopify Payments (or want to go a different route), you can enable clients to make a Shopify transaction via a trusted third party provider, such as Noda.

As far as Shopify credit card processing is concerned, the platform supports two different types of card provider: direct and external.

Shop owners using direct providers will enable their customers to complete purchases of goods and services directly on the online store.

Those opting for an external provider, meanwhile, will require their customers to complete the transaction on a checkout page hosted independently of your online store.

It’s also worth checking the various transaction fees that may be levied by different providers before you decide on your favourted payment gateway.

Activate A Credit Card Payment Provider

These are the steps to follow:

• From Shopify admin go to Settings - Payments
• If you have Shopify Payments, click manage then Switch to a third party provider
• If you don’t have Shopify Payments then click Switch to a third party provider
• Select the provider you want to use
• Enter your account credentials for the provider
• Click activate
• Click save

How A Credit Card Payment Gets Processed

There are four steps involved in the process:

• Authorization: The customer uses their credit card to make a purchase. The payment provider checks with the issuer to ensure that card is valid and has enough funds.
• Capture: Once the payment is authorised it has to be captured. This involves details about the payment being sent to the acquirer.
• Clearing: The acquirer reviews the payment details, requests the necessary funds and then facilitates the payment, albeit less a transaction fee.
• Funding: The final stage. This is when the sum reaches a merchant account.