Starting your online store on Shopify is an exciting beginning for your E-Commerce journey. While you’re all hyped up, it’s super important to choose the best payment gateway for Shopify.
It might not be a big deal, as there are so many Shopify payment gateways available in the market, but trust me, it can really impact how happy your customers are and, in turn, how well your business does.
A good E-Commerce payment gateway isn’t just about tech stuff; it’s about making your customers feel comfortable and satisfied. When they’re happy with how easy it is to pay, they’re more likely to come back for more.
So, what’s the best payment gateway for Shopify?
In this blog, we’ve compiled a list of the best Shopify payment gateways, along with their pros and cons. Besides, we have provided in-depth information on how to choose an E-Commerce payment gateway and the benefits of choosing the right E-Commerce payment solutions.
Let’s check it out..!!
What is a payment Gateway for Shopify?
A Payment Gateway for Shopify is like a cashier for your online store. It’s the tool that securely takes your customers’ payment information (like credit card details) and sends it to the bank for processing.
Think of it as a middleman between your store and the bank. It ensures that your customers’ payments are safe and smooth. When someone buys from your Shopify store, the payment gateway handles the transaction, encrypting sensitive data to prevent fraud. Popular payment gateways for Shopify include PayPal, Stripe, and Shopify Payments. They make buying easy for your customers and help you get paid hassle-free.
Read more: How To Promote A Newly Started Shopify Store? Free In-Depth Guide To Get The Immediate Results
Benefits of Using the Right Payment Gateway for Shopify
Smooth Transactions
Transactions proceed smoothly when using a trustworthy payment gateway. This minimizes the chances of customers leaving their shopping carts because of payment problems, which ultimately helps create a positive shopping experience.
Security Matters
Building trust is crucial in the world of E-Commerce. An effective payment gateway prioritizes the implementation of strong security measures to safeguard valuable customer data, including credit card information. This level of security helps to build trust in your brand.
Global Reach
Payment gateways that are considered the best have the ability to support a wide range of currencies and payment methods. With this capability, your store can effectively serve customers from all around the world, helping you to broaden your market and reach a wider audience.
Quick Payouts
Having quick access to funds is crucial for ensuring the smooth operation of your business. Leading payment providers for Shopify prioritize efficient and transparent payout processes, guaranteeing that you receive your earnings without delay.
How to Choose an E-Commerce Payment Gateway?
Fees
It’s important to familiarize yourself with the fee structure of different payment gateways, such as transaction fees and any extra charges that may apply. Seeking transparency is essential to prevent any unexpected expenses or hidden charges that could potentially affect your profitability.
Security Features
Make sure the payment gateway meets the requirements of the Payment Card Industry Data Security Standard (PCI DSS) and provides top-notch security features. Ensuring the security of your customer’s data is not just a matter of ethics but also a legal requirement.
Integration with Shopify
Choose a payment gateway that seamlessly integrates with your Shopify store. The easier the integration, the smoother your business operations will be, saving you time and potential technical headaches.
Global Support
If you have plans to expand your business globally, it’s important to choose a payment gateway that can handle multiple currencies and ensure a smooth transaction process across different countries. With this feature, your customers can easily make purchases from anywhere, no matter where they are.
Best Payment Gateways for Shopify
Shopify Payments
Shopify Payments is a quick and convenient payment system that allows you to quickly begin accepting credit cards and popular payment methods.
(Source: Shopify)
It easily integrates into your Shopify store, providing a smooth and effortless checkout experience for customers. Say goodbye to complicated third-party setups and say hello to the simplicity of keeping your payments and sales information neatly organized within the Shopify ecosystem.
In addition, Shop Pay allows shoppers to complete their checkout process easily by simply entering their phone number. What’s even better? You won’t have to worry about additional payment processing agencies because it’s all included in your subscription.
When you decide to use Shopify Payments for credit card transactions in your store, you can expect credit card fees that vary from 2.4% to 2.9%, in addition to an extra charge of 30 cents per transaction. The exact fee within this range will vary depending on the Shopify plan you have.
Pros of Shopify Payments
- Easy Setup: Turn it on with a simple click.
- Zero Hassle: Forget about dealing with third-party setups.
- Transparent Costs: No hidden fees or setup costs.
- Versatile: Accept popular payment methods and local currencies.
- Customer-Friendly: Smooth checkout and payment processes for a better user experience.
- Secure Transactions: Real-time tracking with enhanced security measures.
Cons of Shopify Payments
- Limited Availability: Only available in select countries.
- Higher Subscription Fee: Advanced features come with a slightly higher subscription cost.
- Additional Charges: Fees apply for third-party payment gateways.
- Strict Policies: Strict chargeback and fraud policies.
PayPal
PayPal is widely recognized as a leading card processing platform, known for its effortless setup and wide range of payment processing options. Merchants prefer using this Shopify payment option because it allows them to accept various forms of payment, including credit cards, Venmo, pay-later options, and even cryptocurrencies. The user experience is truly impressive.
(Source: PayPal)
The pricing typically falls within a moderate range. For electronic payments, merchants are charged a fee of 3.49% plus an additional 49 cents per transaction. Meanwhile, credit/debit card transactions incur a fee of 2.59% plus 49 cents.
In addition, PayPal provides a Seller Protection Program that safeguards eligible transactions, ensuring that losses are covered in the event of disputes. Keep in mind that there is a non-refundable $20 chargeback fee, and transaction fees are not reimbursed for customer returns. This is an important factor for businesses that deal with frequent E-Commerce returns.
Pros of PayPal
- Innovative Features: Offers considerable and innovative E-Commerce features.
- Diverse Payment Options: Supports multiple payment options, including Venmo and cryptocurrency.
- Trusted Brand: Clean user experience and a globally trusted brand.
- Transparent Pricing: Consistent, flat-rate pricing system for clarity.
Cons of PayPal
- Customer Service Challenges: Customer service can be unpredictable, which is not uncommon for new merchants.
- Chargeback Fee: Imposes a non-refundable chargeback fee.
- Multinational Card Fees: Additional fees for transactions involving multinational cards.
- Strict Policies: Enforces strict policies, particularly for emerging markets.
Amazon Pay
With Amazon Pay, your Shopify store can offer a seamless and user-friendly payment system, making purchases quite simple for your customers. The easy integration with Shopify, along with its impressive features, such as online donation support and recurring payments, has made it a top choice for well-known brands like Lenovo and Canon.
(Source: Amazon)
Although having an Amazon Seller account is necessary, it is not compulsory to list products on Amazon. With the inline payment system, buyers can enjoy a smooth checkout procedure right on your Shopify store without any annoying redirects.
By using Amazon Pay, you can take advantage of Amazon’s A-to-Z guarantee. Plus, if you already have an Amazon account, you’ll save time by having your shipping and billing information already saved. This sets it apart from other tools, such as Stripe. In addition, Amazon provides express payout, which allows you to access your funds more quickly.
Pros of Amazon Pay
- Brand Trust: Leverages Amazon’s brand equity for enhanced trust.
- No Early Termination Fees: Freedom from early termination charges.
- Quick Integration: Swift integration with an inline payment option for seamless transactions.
- Excellent Customer Service: Outstanding customer service with a user-friendly experience.
- Enhanced Shopper Engagement: Autosaves checkout details to boost shopper engagement.
- Fraud Protection: Includes Amazon’s fraud protection as a valuable benefit.
Cons of Amazon Pay
- Higher Costs for High Volume: Merchants with high-volume transactions may incur elevated costs for faster processing rates.
- Amazon Account Requirement: Setup demands an Amazon account.
- Strict Dispute Rules: Strict rules on payment disputes may result in withheld funds.
Stripe
Stripe is a powerful player in making online payments accessible to everyone. Known for its versatility and durability, it performs exceptionally well when it comes to managing repetitive transactions and subscriptions.
(Source: Stripe)
Stripe offers transparent fees and fast two-day payouts to improve working capital. Additionally, they provide an Instant Payouts option, allowing access to funds within 30 minutes for a nominal cost of 1%, with a minimum charge of 50 cents per order.
It’s worth mentioning that there is no monthly fee associated with this service. Instead, charges are based on the number of transactions, which typically amount to around 2.9% plus an additional 30 cents per transaction. There is an extra 1% fee for international or currency conversion transactions.
Pros of Stripe
- Instant Payouts: Option for rapid access to funds.
- No Hidden Costs: No setup, cancellation fees, or monthly charges.
- Effortless Onboarding: Seamless and user-friendly sign-up process.
- Customizable Checkout: Tailor the workflow for a personalized user experience.
- Transparent Pricing: Clear, flat-rate pricing method.
- Advanced Tools: Cutting-edge reporting and subscription features.
- Versatility: Supports multiple payment options and currencies.
Cons of Stripe
- Limited Accessibility: Not available in all countries.
- Technical Knowledge: Requires some technical expertise.
- Excludes High-Risk Verticals: Does not support businesses in certain high-risk sectors.
Klarna
Klarna is a fantastic choice for enhancing your Shopify payment options. They work closely with merchants to ensure that transactions are made more affordable. It accomplishes this by dividing costs into installment loans that don’t charge any interest and are paid off over a short period of time.
(Source: klarna)
Merchants partner with Klarna to offer customers the convenience of making purchases and deferring payment, which often leads to a boost in sales. There is a fee of 2.49% + 0.20 GBP per transaction for transactions made from regions such as the United Kingdom or Ireland.
Klarna provides a distinctive feature: a prepaid Visa card that can be used once, specifically designed for online retailers. With this virtual card, buyers can conveniently make transactions at any merchant that accepts prepaid Visa.
When you integrate Klarna with Shopify Payments, its options automatically become the default ones. Once your business is approved by Klarna, customers will be able to effortlessly complete their purchases using Klarna’s checkout system. It’s worth mentioning that when you issue a refund to Klarna, Shopify will also refund the processing fee that was charged to you.
Pros of Klarna
- Smooth Integration with Shopify: Integration with Shopify is smooth and seamless.
- Low Transaction Fees: Klarna offers low transaction fees.
- Complete Payment at Checkout: Shopify store owners can receive complete payments at checkout.
- Effortless Checkout: Provides a smooth and easy checkout process.
- Flexible Installment Payments: Offers flexibility with installment payments.
Cons of Klarna
- Vulnerabilities in Internal Systems: Potential vulnerabilities in internal systems may pose risks for fraud.
- Unpredictable Customer Service: Customer service can be unpredictable.
- Transaction Fees for Businesses: Businesses are charged a fee for each transaction.
Thoughts
Now, choosing the right Shopify payment gateway might no longer be difficult for you. We have deeply discussed every payment gateway along with its distinct advantages and factors to consider.
Where Shopify Payments is known for its simplicity and seamless integration benefits, Stripe provides a wide range of options and clear pricing. PayPal is a well-known payment gateway for Shopify that offers a reliable and forward-thinking experience, and Amazon Pay takes advantage of its extensive user network and quick payout functionality.
In addition to this, Klarna stands out as a fantastic complementary choice, providing affordable transaction fees and effortless integration.
In the end, the choice of the perfect Shopify payment method will vary depending on what matters most to you, your customers, and the level of integration you want for a successful online business.
If you ever have any queries or concerns about Shopify development, feel free to reach out to us. We have a team of skilled Shopify developers ready to assist you in any way you need.
