Shopify consistently ranks as one of the top e-commerce solutions for businesses all over the world.
Shopify helps businesses build and run an online store through its platform. Essentially, it is Wix.com or Squarespace.com for e-commerce.
Many businesses, especially ones that were originally just brick and mortar, rely on Shopify as a vital tool. Shopify helps businesses have an online presence as well as collect payments. However, the problem lies in the latter, with native Shopify payment processing not being ideal.
For this reason, the online platform has made improvements to its Shopify payment gateways. We will guide you through the various options for Shopify payments and third-party payments processors so that you can optimize your online store.
Shopify Payment Gateways Fundamentals
As for any small business, payments are everything. Ensuring that customers have a good payment experience can make or break the sale. Do not be surprised when a customer abandons their cart when the Shopify payment gateways irritate them. Even more, a user-friendly experience will keep customers coming back. You should strive to select the best payment method for your customers.
What exactly are Shopify payment gateways? Shopify explains that a payment gateway is a payment processing technology that communicates transaction information between the customer and the merchant. Businesses need a payment gateway to securely accept credit and debit card payments while ensuring data protection for all parties.
Types of Shopify Payment Gateways
There are a few types of Shopify payment gateways. First, hosted or redirect payment gateways take the customer off your site to another payment page. Once the customer completes the payment, they are redirected back to your site. This method can be a little disruptive for the user experience but is usually an easier online payment implementation for your business.
Second, self-hosted gateways have the merchant collect the payment information and send it to a third-party payment gateway. All of the Shopify payment processing occurs off-site and usually requires back-end integrations between your site and the third party. However, this type of Shopify credit card processing does make for the most seamless experience for users.
Lastly, non-hosted payment gateways require the merchant to collect and process the payments on their site. In general, this type is used by large enterprises that have the technical resources to develop and maintain it.
Factors to Consider When Choosing Shopify Payment Gateway
After our Shopify payments review, you should have a better understanding of the many options for processing payments. But before you pick one, consider the below factors. They should act as guidelines so you can select the ideal one for your business and customers.
Who is Your Target Audience?
Like any good marketing strategy, your focus should be on your target audience. There are many Shopify payment gateways, but not all of them will be right for your customers. Narrow down the major characteristics of your customers so that you have a better idea of who they are and their needs. You may discover your customers prefer certain Shopify payment gateways over others.
Most importantly, be aware of the geographic location of your customer base. Shopify only accepts third-party payments by specific geographic region. Review which Shopify payments are acceptable for your target market. If your business serves an international market, ensure you select from the Shopify payment gateways popular in that location.
Further, we encourage you to think long-term. Do not only pick Shopify payment gateways that serve your present customers. With e-commerce, you will be able to expand more than you ever thought possible. Many of the more popular payment gateways are transferable to different parts of the world.
Choose a gateway for Shopify payment processing that addresses the needs of your current and future customers. Additionally, it is worth considering the currency of the different markets.
How Many Others Use This Gateway?
You will want to use a payment gateway that is widely used. Most, like the popular PayPal, require the user to have a pre-existing account with them that is often connected to a bank account.You do not want to deter your customers from completing their purchases if they have to jump through hoops by creating another account.
Once you have a list of some potential candidates, search for reviews on them and see what others are saying about them. You should also evaluate the total number of users. This will give you a better indication of whether the third-party payment will be accessible to your customers.
Similarly, be cognizant of the credit cards that are accepted. You will want a payment gateway that accepts the most popular credit and debit cards. As we mentioned in the previous factor, do not forget to consider globally acceptable credit card payments so you can expand later on. Shopify payment gateways should accept, but are not be limited to, VISA, Mastercard, and American Express.
What Fraud Detection Capabilities Does it Have?
What makes a payment gateway popular is not solely on it being the most used. With the advancement of technology, fraud schemes and identity theft are rapidly increasing. Shopify payment processing gateways with fraud detection and other security capabilities are growing in popularity. Ease your and your customers’ concerns by doing a fraud analysis and picking among the safe and reliable Shopify payment gateways.
How Much are Transaction Fees?
The pricing structure and fees will depend on the provider. Some payment gateways may charge a monthly usage fee while others may charge per transaction. When determining the right payment gateway for your business, take a step back and look for various fees, particularly if there is no monthly fee. There may be some less obvious fees such as chargeback fee, start-up cost, and settlement fees.
You want to be sure you can anticipate the total costs to avoid affecting your profit margin. On the other hand, some payment gateways do not charge any fees to integrate such as Shopify Payment, Shopify’s very own payment gateway. We will get to specific payment gateways to consider in just a bit. For now, be wary of hidden fees and budget appropriately if you do go with a payment gateway that charges.
Shopify and Third Party Payment Gateway Examples
After discussing the considerations you should use when choosing between Shopify payment gateways, we have a few solutions that may help you finalize one. At the very least, it will act as inspiration for you. There are many different options out there and no single payment gateway is perfect.
As we previously mentioned, you can begin by browsing through Shopify’s approved third-party payment gateways for the region(s) your customers are in. Then narrow down which one is right for your business with the factors we discussed.
We alluded to this solution earlier for its no fees structure, but it does come with many other advantages. For starters, Shopify Payment already comes integrated with your business’s Shopify store. You do not have to worry about the hassle of setting up an integration. Another perk is that you do not have to go off-site for your online store and financials. It is all in one single place.
Shopify Payment does have credit card rate fees that vary depending on your Shopify subscription. Fortunately, there are no transaction fees. This Shopify payment processing method is newer compared to other big players in the industry. The amount of countries Shopify Payment is accessible for is low. However, as Shopify grows, you can expect that this offering will too.
This payment gateway is probably the most widely used and known. Despite PayPal being a third party payment method, the setup for Shopify payments on PayPal takes less than a business day to get things up and running. Additionally, there are options for free and paid merchant accounts.
Although, PayPal does include a minimum fee on all transactions. But sometimes the cost is worth it. When considering Shopify payments vs PayPal, PayPal comes with several great functionalities and customer support. More importantly, PayPal is an acceptable payment gateway in most countries.
Just like PayPal, Stripe consistently ranks highly among the most popular Shopify payment gateways. Stripe stands out from the other Shopify payment options for its robust tools to help you customize your payment process. This third-party payment system accepts a wide range of payment options and currencies.
The drawback to Stripe is that it is intended more for large businesses due to the technical setup required. Stripe utilizes APIs which offers great flexibility and functionality if your business is capable to use them. Likewise, its pricing is structured in a way that favors higher volume and discounts for enterprises.
These were just a few of the many Shopify payment gateways available. It is worth also worth mentioning Authorize.net, SagePay, and AliPay Global. Do your research on each of your contenders and do not rush into picking one. Shopify payment processing is vital for the success of your online business because that is where your profits come from.
Shopify Payment Processing for Your Business
It is not easy to pick from the many different Shopify payment gateways out there. We hope that you have a better idea of what to look for and what is right for your business. Having a well-designed Shopify site is only one piece of the entire puzzle. You see the significance of choosing a third-party payment in order to have the most user-friendly payment process.
If you need help improving your e-commerce site, contact SEO Design Chicago today. We continually improve many businesses’ e-commerce sites through consultation and Shopify web development.
- What are Shopify payment gateways?
- How much do third-party payment gateways cost?
- Why is Shopify payment processing important?
- What are the most popular gateways for Shopify payments?
- Where to find Shopify payment gateways?
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