Every transaction on e-commerce sites is built on payment gateways. Without Shopify payment gateways, businesses can’t accept and process consumer payments or access the associated transaction data.
Payment gateways for Shopify provide secure credit and debit card payments both online and physically if PoS (point-of-sale) is utilized, protecting both the business and the customer.
When deciding which Shopify payment gateway to utilize, a number of criteria must be taken into account. Depending on the nature of your business, some payment gateways may be more appropriate for you than others in terms of things like pricing, setup time, and location. This post covers every detail you require to know in order to select the finest Shopify payment gateway for your online store.
What Options Are There For Shopify Payment Gateways?
Over the past 10 years, the e-commerce and Shopify markets have grown rapidly, increasing competition among several businesses, including Shopify payment gateway technology. When setting up a store on the Shopify platform, Shopify Payments, which is available ready-to-use, tends to be the most frequently used payment gateway. There are other third-party payment providers that can be connected to Shopify, and they are widely utilized on a variety of platforms all around the world. For users who are already accustomed to various platforms, implementing some of these can increase convenience and flexibility.
Different payment gateways, each with its own pricing models and degrees of user-friendliness are often used in various regions of the world. We’ll compare each well-known payment processor in greater depth.
Various external Shopify payment gateways are:
#1- Shopify Payments
The built-in payment gateway for Shopify, called Shopify’s Payments, saves businesses the time and effort of setting up any third-party payment processor. The fact that Shopify payments are immediately configured to take some of the major payment processors is an added benefit. Transactional information, including orders, payments, and payouts, can be viewed and managed within the Shopify admin panel because Shopify Payments is natively integrated within the Shopify platform. With third-party gateways, which must be examined externally through their own admin areas, this cannot be directly accessed.
Utilizing Shopify Payments has additional advantages because it has built-in risk features that can assist detect dubious orders. Additionally, the platform provides free card readers to merchants that want to incorporate Point-of-Sale payments for in-person transactions, which is ideal for brick-and-mortar enterprises.
Payments made by customers may take up to 3 business days to reach the retailer. Depending on the Shopify plan the merchant is on, the card processing fees for transactions vary slightly. The card rate is 2.2% + 0.20 pounds for businesses on the Basic Shopify plan, 1.9% + 0.20 pounds for those on the Standard Shopify plan, and 1.6% + 0.20 pounds for those on the Advanced Shopify plan, with no additional fees.
By the end of Q2 2021, there will have been 311 billion transactions completed through the PayPal app, making it the most widely used third-party payment gateway for Shopify. PayPal is quick and easy to set up, and it offers both free and premium merchant account alternatives. Using PayPal as a payment gateway for Shopify has a number of benefits, not the least of which is the support system it offers in the event that clients or merchants run into issues with transactions conducted on the system. The fact that it accepts international payments, is mobile-optimized, and enables businesses to receive money immediately into their PayPal accounts are further benefits.
A PayPal Express Checkout account is provided to merchants with the email they used to sign up for the Shopify store since PayPal is one of its default payment gateways. Once this account is set up, payments can be made for orders placed through PayPal.
When estimating profit margins for your Shopify site, remember that merchants are charged transaction fees anytime a transaction is paid for via the PayPal service. These fees range from 1.9% to 3.4% per sale. If the merchants have Shopify Payments activated as well, these fees can be avoided; doing this will increase your online store’s profit margins.
#3- Amazon Pay
Over the last ten years, Amazon has dominated the e-commerce market. With over 200 million active users, adding Amazon Pay to your Shopify store enables a large number of customers to swiftly and conveniently make purchases using their Amazon account information. Additionally, consumers feel confident when making purchases on Shopify stores and websites of any size because of the high level of trust associated with the Amazon brand.
If a merchant already has an Amazon Professional Seller account, they can integrate Amazon Pay into their Shopify sites. Amazon costs £25 per month to keep this account active. There are additional transaction costs that are more expensive than those of other Shopify payment gateways, which may put off smaller retailers. For low-volume selling enterprises that depend more heavily on short-term cash inflows, it is not the best Shopify payment gateway because money from consumer payments can take a few days to reach the merchant’s account.
The percentage of each sale is 2.9% + $0.30 for domestic internet or mobile transactions and 3.9% + $0.30 for foreign transactions. Alexa’s smart assistant charges 4% + $0.30 for domestic transactions and 5% + $0.30 for global ones. Fees for charitable organizations are 2.2% + $0.30 for domestic transactions and 3.2% + $0.30 for international ones.
Merchants can accept payments both offline and online thanks to Stripe, a versatile Shopify payment gateway. It offers integration of up to 300+ tools and includes a variety of tools to assist in customizing the checkout experience. Since Stripe powers Shopify Payments, there’s no need for a separate payment gateway in the nations where Shopify Payments is also offered. For retailers in areas where Shopify Payments is not available, integrating Stripe is a fantastic alternative.
Benefits of using the Stripe platform include how simple it is to set up and can be operational in less than a day, as well as how inexpensive in-person payment transactions are at 1.4% of the sale + £0.10 for European cards and 2.9% + £0.10 for non-European cards, making it the best Shopify payment gateway option for businesses that deal with many European customers and/or need their store to be operational quickly.
Although there are no recurring fees or complicated rates after this, it’s important to keep in mind that in-person transactions need retailers to acquire a card reader, which Stripe may provide for £49 for the mobile card reader or £179 for the touchscreen card reader.
One of the top Shopify payment gateways for its BNPL (buy now, pay later) buying strategy is Klarna. Customers have the option to divide the cost of transactions into three interest-free installments using this arrangement. Customers are provided flexibility with up to 36 months to pay. Therefore, Klarna is useful for converting clients who need extra financial flexibility to complete their transactions, improving merchant selling volume. Additionally, there is no danger to the merchant because they’ll still get the entire amount even if the customer is unable to settle their obligation with Klarna.
1.9% per sale plus £0.20 is a competitive starting fee for each transaction. For businesses that deal with regularly big sales volumes, Klarna is one of the finest Shopify payment gateways because these fees are lowered with increased sales volume.
When Trustly first began accepting online payments in 2008, there weren’t many other options. Another Stockholm-based payment processor, Klarna, was still a young company. The three most popular options at the time were PayPal, Skrill, and MasterCard. However, a provider who could serve European Internet stores was in demand. So, Trustly was created. The firm gained popularity fast, as evidenced by the fact that it negotiated many contracts with online shops just a few weeks after its debut. The business raised money in 2009 to develop a more secure payment processing system. Next, it grew outside of Sweden in 2010.
Let’s be frank. There must be explanations for why PayPal, banks, reputable sportsbooks at Bookmaker-Expert.com, and several e-commerce retailers have joined Trustly. For instance, PayPal only does business with organizations that use cutting-edge security procedures. Additionally, it favors companies with open data privacy policies. In light of this, Trustly invested millions of euros in redesigning its system in 2010. Back then, the corporation wanted to create a safe platform that would be nearly impossible for hackers to breach. Nobody has managed to hack the network thus far.
Trustly complies with SSL standards for the protection of consumer data. As a result, the payment provider cannot access any of the information you supply because it’s encrypted. Additionally, Trustly complies with the new GDPR data regulations to guarantee the ongoing security of your data. To find out exactly what data the company gathers and how it uses it, go to its data privacy website. For more information, you can also get in touch with the business.
#7- Shop Pay
Customers can save their payment information, shipping address, and billing information with Shop Pay, a convenient payment gateway, for faster checkout each time they make a purchase from a Shopify site. Similar to PayPal, this payment gateway streamlines and simplifies the checkout process so that customers are more likely to make further purchases.
The Klarna-inspired installment/buy now, pay later business model is also available through Shop Pay. Customers who place orders between $50 and $3000 can choose to pay the entire amount at checkout or divide it into four interest-free installments using this Shopify payment gateway. The fact that customers are not subject to any additional interest rates, late fees, or other costs is an advantage.
The fact that Shop Pay is fully integrated as part of Shopify and does not divert customers away from the merchant’s store is a benefit over Klarna. Consequently, it serves as the ideal Shopify payment gateway for keeping visitors on your website. Once the order is fulfilled, the merchant receives the entire amount minus the Shop Pay service fee.