A question i’m asked a lot… How does shopify pay you?
Today i’m going to answer this question and cover everything you need to know about this topic.
Shopify is one of the leading eCommerce solutions in existence.
For me this is mainly due to:
- Their advanced online marketing techniques
- Ease of use
- Reliable customer support
- Flexibility of their services
Note, however, that despite the glowing reputation, Shopify payments have had their own issues…
Before we go any further I want to make my thoughts on Shopify clear, I’ll include an overview below.
Anyway, back to it.
The previously used card payments processing function was a huge sore point for Shopify online store users.
To receive card payments, one would have to engage the services of a third-party payment solution (Usually a headache).
It’s expensive and complicated due to the fact you’d only process payments by going through a different dashboard.
You’d also be charged an extra fee for this…
But everything is now changing thanks to the introduction of the Shopify Payments Gateway.
This payment processing system is accessible directly from the main Shopify dashboard, which is easily managed via your store’s dashboard.
This payment gateway now allows payment processing via PayPal, Authorize.net, and Stripe, among other payment apps.
Before you decide on your chosen payment system, take the time to understand the different payment options shopify now offers.
It’s worth taking the time to make sure you find the right solution for you and your business.
If you are interested I’ve written an article on How does Shopify work? This runs through everything a beginner would want to know.
Shopify Payments Gateway
The introduction of Shopify’s unique payment system means that you can now enjoy seamless payment systems.
The platform is designed for both the building and running of online stores as well as brick and mortar stores…
The presence of a dedicated payment gateway system is a great win that enhances the payment processing speeds, whilst reducing the transaction costs.
Win Win
Thanks to the Shopify Payments Gateway, all Shopify users accept card payments without any third-party integrations.
With this payment system, the fees charged stand at 30¢ for all online card transactions plus a standard fee ranging from 2.4% to 2.7%, depending on the Shopify plan you’ve subscribed to.
Shopify Payments
Shopify Payments refers to a third-party service that is used for the management of payment.
This manages the payment steps taken by users from the time they enter their card details at the checkout to the time the money reaches the bank account.
Shopify Payments is applicable to all credit cards that have been linked with Shopify directly.
In addition to the reduction in the transaction fees, Shopify Payments is also an excellent payment option for Shopify store owners since it cuts out the middleman previously involved.
Shopify payments makes it cheaper and removes a lot of the headaches!
Payment Fees
When using Shopify Payments, there is something you should be aware of…
If you are wondering What is shopify payments? Read this article.
This new system gets rid of the commissions that Shopify would otherwise take, in addition to the gateway fees…
Currently– 2%, 1%, and 0.5% for the Basic Shopify, Shopify, and the Advanced Shopify accounts, respectively.
The best bit is that these rates also apply if your customers pay for products via the PayPal checkout option.
As Shopify Payments is a free service, you have nothing to lose if you install it today.
The good news is that Shopify Payments are activated automatically in your Shopify store if the service is available in your country.
Pros and Cons of Shopify Payments
Pros
- It boasts a seamless integration as it sits at the perfect place on your Shopify dashboard. You no longer have to log into a different platform then go through a lengthy payment processing system.
- It lowers the transaction fees charged
- You can use it along with other reputable payment options like PayPal and Stripe.
Cons
- It’s not accessible to Shopify store owners in all countries
- You must comply with the strict products Terms and Conditions
- There is a chargeback fee of $15/chargeback
- Your funds could be frozen suddenly
Third-Party Shopify Payment Providers
Shopify Payments is an excellent option for most users…
But you may need to use other third-party services if it isn’t supported in your country.
The third-party payment providers should ensure efficient processing of payments and they should also ensure the efficient release of funds to your bank account.
But before you sign up for these services, keep the following in mind:
- These service providers have their own sets of rules and regulations, and you must read through and understand the fine print before you sign up for their services.
- These payment providers often charge extra fees for transaction processing.
- Look at reviews from other users before deciding to go ahead
Getting Paid on Shopify
Whether you choose Shopify Payments or a third-party service, the income generated from your store’s sales will be transferred to the bank, only upon withdrawal.
Essentially, a customer pays for a product, and then you will receive your payment, less the transaction fees, and any other applicable fees, whether you use Shopify Payments or a third-party payment service provider.
The payment process involves the following steps:
- First, select your preferred payment provider – Shopify Payments or any other provider.
- Keep in mind that payments are only processed through the verification of credit card details, as well as the customer information, as charged to a buyer, and the proof of delivery of the purchased products.
- After product payment and delivery (the actual transaction), the relevant amount is credited to your Shopify Payments’ account or the third-party’s account. The third-party merchants are the only ones that charge the transaction fees, not the Shopify Payments account.
- Next your earnings (less the transaction fees and other fees) will be credited to your bank or any other preferred payment provider from where you can withdraw your money.
- The processing of payments takes a couple of days. So, you might want to manage your expectations on same-day payments from Shopify.
I know that may sound complicated but it’s actually pretty straight forward.
How to Set Up Your Shopify Payments Details
Although the integration is automatic, you need to set up your Shopify Payments account within 21 days from the day you make your first sale.
Failure to complete the account setup in the 21-day period forces Shopify to refund your customers for their payments.
No one wants this!
Once your account is set up, you get to track your payouts through the Admin section.
Keep in mind that Shopify Payments doesn’t charge any transaction fees, they only charge the card rate.
Store owners within Europe should be aware of their VAT implications…
If you are based in Europe make sure you fully understand your tax and VAT responsibilities before you start selling!
The other thing to mention is that you can opt to receive your own currency as you withdraw money from your Shopify payments account.
How Often Do You Get Paid on Shopify?
Generally, it all depends on the payment service provider you choose.
For example, if you are using Shopify Payments, you will enjoy their built-in pay period system that tells you just how long you have to wait to receive your payments.
By default, you’d get money in the bank the same day a customer orders and pays for a product from your store.
The Shopify system also groups payments that have been made on a Friday, Saturday or Sunday to be totaled and paid in one single payment.
You should also be aware of the fact that the funds will not reflect in your bank account automatically since the transfers from the payment merchants to the bank take as much as 72 hours, depending on your bank and where you are based in the world.
For example, processing transactions to bank accounts in Japan could take more than 5 business days (most of these transactions are finalized on Wednesday, while transactions in the US and Australia take a maximum of 2 business days).
How to Check Your Payments
To check your payment follow these easy steps.
- Log into your Shopify Account
- Go to the Admin Section
- Click on the Settings tab
- Click on the Payment Providers
- Go to the Shopify Payments sections, click on View Payouts.
How to Schedule Your Payouts
The other advantage of using Shopify Payments is that you get to schedule your payouts…
For payouts scheduling, follow these steps:
- Log into your Shopify Account
- Go to the Admin section
- Under the Settings tab, choose the Payment Providers
- Find the Shopify Payments section then click Edit.
- Next, select the Payout Schedule section and click on the edit tab.
- Select the payout schedule that works best for you and then save the changes (Click Save)
When it comes to scheduling payment there are a few further bits of information you might find useful:
- It’s impossible to schedule payouts if your Shopify store is based in Japan. As mentioned above, payouts to Japan stores are done on Fridays only
- The payments are always scheduled for release on a daily basis, or as soon as the payment is available; by default
- A weekly or monthly scheduled payout maybe preferable if you don’t want to be paid every day.
- An update to your payout schedule affects the release of your unpaid funds since the update in the payouts’ schedule takes effect immediately.
- Bank delays are to be expected.
- In the event of a failed payout, you will receive a notification from Shopify, but you should contact your bank. In other cases, failed payouts result from funds being placed on hold because of your payout schedule.
- Also, you will receive a notification of payout failure on the payout page. First, click on the Retry payout page to resolve the issue before you follow up with the bank or Shopify.
Is Shopify Safe To Use?
I wanted to cover this question because it’s something i’m always asked about any bit of software.
Shopify is about as safe as it gets.
I’d go as far as saying it’s probably the safest ecommerce platform out there.
Shopify is a fully hosted platform, unlike others like Magento or Woocommerce.
Shopify are constantly running risk analysis on all sides of their platform…
They are a huge company with a huge security team to protect both customers and sellers alike.
Their security updates are constantly rolled out and all stores are updated.
If you compare this to say Woocommerce, each site administrator has to patch and update the site themselves.
Shopify HAS to be secure, they are PCI compliant and every single store has free SSL encription.
It’s a much safer option when comparing to other open source competitors!
Closing Thoughts
Hopefully you now know much more about the shopify platform.
Shopify is a great place to do business…
I should also say, well done for taking the time to go out and do the extra research!
When it comes to customer data and payment information it’s best to consider using a trusted platform like Shopify.
Hopefully now you understand all of the ins and outs of Shopify payments if you’ve got any questions please ask away below.
When setting up your Shopify Store, don’t forget to adhere to their terms and conditions (The success of your store may depend on it).
If you are struggling to set up your shopify store you may find the following tutorial useful…
