Home »MyWorks Blog »What You Need To Know About Shopify Payment Methods

What You Need To Know About Shopify Payment Methods

MyWorks Team

Shopify is a mainstay for ecommerce businesses of all sizes, offering the features customers have come to expect from online retailers in 2023. It’s a flexible and robust platform that scales with the size and complexity of a website effectively. There are over 4 million live Shopify websites, which is a testament to the trust people place in this software. But the choice of payment solutions on this platform isn’t so clear cut. When it comes to ecommerce payment methods, there are multiple third-party solutions that offer a range of features and choice. Alternatively, Shopify has also partnered with Stripe to create Shopify Payments, a first-party integration that offers an alternative to existing solutions. The question is: which payment method is right for your business, Shopify or a third-party solution? And what should you look for in an ideal platform? Our article will compare the different methods to help you decide.

What Is a Payment Method?

A payment method, sometimes referred to as a payment gateway, is the way in which a customer completes a financial transaction on a website. Once they’ve confirmed a purchase, the tool guides them through the checkout and authentication process via the gateway chosen by that domain. Customers have come to expect a consistent, seamless, and straightforward experience when shopping online. Whatever payment method you choose will have to meet these standards to help you remain competitive. That means your decision has a huge impact on the way users engage with your ecommerce store. It’s important to note that your choice of payment method does not necessarily affect your web platform. It’s entirely possible to choose PayPal or Stripe whether your store uses Shopify or WooCommerce, for example.

What to Consider When Choosing a Payment Method

With a host of different features and payment plans for businesses to consider, selecting the right one isn’t a walk in the park. Before committing to a specific gateway, you need to think about your unique requirements and ensure that you search within those guidelines. It’s always best to be sure of your decision, given the depth of integration between your ecommerce store and chosen payment gateway. Otherwise, you may end up making last-minute adjustments in the future. Here’s what you should be looking for.

Security Features

Security features, as well as their integration into the payment process, have a profound effect on the shopping experience for your customers. Customers make payments from a store in a range of ways: through apps, mobile devices, via VPNs, on their desktops, and even via remote desktops through iPads and other tablet devices. This means that security has to be a top priority for your payment method to protect both you and your customers during a transaction. Customer confidence depends on the strength of your security features, and in extreme cases, Shopify will withhold funds when it detects insufficient checks. Using two factor authentication is also essential, as well as SSL and TLS encryption at a minimum, though further measures like minimum password requirements are highly desirable as well. Another consideration is gateway uptime metrics, as you want to ensure your chosen platform is reliable and robust at all times. Note that there are also industry standard requirements for all payment gateways, such as PCI DSS compliance.

Fees

Each payment gateway asks you to agree to their terms to use their payment gateway. Some conditions suit small businesses, where monthly subscriptions are either low or even free, and instead the platform just takes a percentage from every sale made through their gateway. Keep in mind that these costs will be unique to each ecommerce platform. For larger businesses, it’s likely that an enterprise-tier subscription model will be better. These tend to reduce fees at point of sale (POS) so – if you’ve got a steady business, this will be a more suitable option.

Geographical Availability

Some payment providers only offer services to specific countries. This can be due to a number of reasons, but ultimately you need to ensure your payment method both serves your country and any locations where you regularly take sales. For example, if your business offers an internet phone service in the US yet your main location is in Germany, your payment gateway should serve both countries and offer currency conversion at the point of sale. The buyer pays in USD and your business receives funds in Euros.

Ease of Use and Integration

Customers want convenient features throughout your domain like hyperlinked contact numbers that allow them to easily call you for support and information. The same is true for payment gateways. Some payment platforms have taken extra steps to provide user-friendly features that go above their competitors. For example, many customers appreciate the ability to see shipping updates within the basket opposed to the shipping stage. Offering this extra oversight is especially important for international ecommerce brands, where shipping is a more complex process. It’s also important to review how the gateway integrates into your Shopify platform itself. While it is common for payment gateways to route customers through a third-party domain when processing payment, there are platforms that connect directly with your website and can manage the payment process all within your domain. It’s vital that users feel the journey is cohesive through the checkout process – from the initial basket through to order confirmation. Keeping the whole journey on a single platform can help maintain consistency and build confidence in the process. Finally, don’t forget to take a look at what support they can also offer you. There’s nothing worse than your payment system going down and you’ll want to be sure that whatever method you select offers 24/7 support either through a cloud phone service or chat service.

What Are the Best Payment Methods?

There are a number of trusted solutions that have served ecommerce businesses for several years. Here are the main ones to consider before you commit to a payment method.

Shopify Payments

Having come onto the scene in 2013, first-party integration Shopify Payments is a well established and key competitor in the space. Shopify includes the pricing in its pre-existing subscriptions, meaning that you will already have access to the Shopify Payments gateway. The credit card rates are below within the subscription options. As you rise through the tiers, the rates improve, which scales with your business’s revenue and throughput of sales. It’s worth checking if your territory is available, as Shopify Payments only serves a restricted number of countries at present.

Stripe

Stripe is a well established third-party integration, serving ecommerce businesses across the globe with convenient and secure payments. There is a simple pricing solution, available to all businesses of any size or status, and custom pricing options for large businesses that process a lot of payments. The platform has designed its features and pricing with international businesses that want to scale and grow. You can set up and cancel your relationship with Stripe without incurring additional fees, and the platform features a customizable checkout experience to ensure you deliver a consistent user journey for visitors to your website.

PayPal

PayPal has a reputation as a trusted payment platform, serving customers worldwide. It is available for all major ecommerce platforms, including Shopify, and can manage international business with ease. Even though it is a third-party solution, it’s built a lot of trust in the marketplace. According to a report, 69% of users feel more confident in a merchant that offers PayPal payments. For small businesses that are developing customer rapport, this is a huge benefit as customers know that PayPal is handling the money. Pricing is fixed and standardized, set out at 3.49% + 0.49$ per transaction for any online payment and 2.29% + 0.09$ per transaction for in-person payments.

Amazon Pay

Amazon is possibly the most well-known eCommerce business in the world, with a huge customer base and brand trust unlike any other. You can leverage the power of Amazon’s payment platform to kickstart your business, integrating a powerful and robust payment gateway into your website. It’s worth noting that users will need an Amazon account to complete a transaction, which affects the user journey during your checkout process. Customers are more likely to feel comfortable, given they’ve probably purchased through Amazon before, and they will be able to pay quickly using their existing account’s credentials and payment details. Fees are flat at 2.9% + $0.30 per transaction.

The Next Steps

Choosing the best-fit payment method helps you set up your ecommerce business for success. With the right platform, you can guarantee online customers a quick, convenient, and secure checkout process. Our guide has covered the different considerations when choosing a Shopify payment method, including security measures, fees, international payment options, and integration. From here, you can then select the solution that best fits the needs of your business and your customers. Once you’re ready to make a decision, you can start successfully integrating your chosen gateway into your ecommerce website. If you take care in crafting the user journey—from product exploration to order confirmation—and test the checkout process multiple times for issues, you’ll be sure to have a smooth launch..