Navigating the payment process on Shopify involves understanding the ecosystem of payment providers, transaction fees, and the flow of funds from customers to your merchant account. Here's a breakdown to simplify how getting paid works on Shopify, highlighting key points about different payment methods and the timeline for receiving payments.
Payment Providers and Transaction Fees
Third-Party Providers: Shopify supports a variety of payment methods, all of which rely on third-party providers like PayPal, Amazon Pay, and others. Each provider may have its own set of fees and rules about the types of products you can sell.
Shopify Payments: Activating Shopify Payments eliminates third-party transaction fees for orders processed through Shopify's checkout system. It supports various payment methods, including credit card payments and accelerated checkouts like Apple Pay and Google Pay.
How You Get Paid
1. Credit Card Payments: When a customer makes a purchase using a credit card, the payment goes through a processing stage before being transferred to your merchant account. This involves authorization, capture, clearing, and funding stages.
2. Payment Gateways and Accelerated Checkouts: Depending on the chosen payment method (e.g., PayPal, Amazon Pay, Shop Pay), the process and timeline for getting paid may vary. Generally, funds are transferred to the merchant account associated with the payment gateway.
3. Shopify Payments and Payouts: If using Shopify Payments, you'll receive payouts directly through Shopify, according to your pay period schedule. Other providers will have their own payout schedules.
| Payment provider | Provider type | How the customer pays | How you get paid |
|---|---|---|---|
| Shopify Payments | Payment gateway | Using Shopify Payments | Through Shopify Payments |
| Apple Pay | Accelerated checkout | Using Apple Pay | Through Shopify Payments |
| Amazon Pay | Payment gateway | Using Amazon Pay | By Amazon |
| Amazon Pay on Shopify Payments | Accelerated checkout | Using Amazon Pay | Through Shopify Payments |
| Meta Pay | Accelerated checkout | Using Meta Pay | Through Shopify Payments |
| Google Pay | Accelerated checkout | Using Google Pay | Through Shopify Payments |
| PayPal | Payment gateway | Using PayPal | By PayPal |
| Shop Pay | Accelerated checkout | Using Shop Pay | Through Shopify Payments |
| Shop Pay Installments | Payment gateway | Using Shop Pay | By Affirm, through Shop Pay Installments |
Payout Schedule and Bank Deposits
Shopify Payments Schedule: Shopify Payments users can check their admin for the pay period and expected payout dates. Payouts are typically sent within a few business days after capturing the payment.
Bank Processing Time: After a payout is sent, it may take additional time for your bank to process and deposit the funds into your account. Note that payouts aren't sent on bank holidays.
Transaction and Processing Fees
Shopify Payments Users: You're exempt from third-party transaction fees but will pay credit card processing fees based on your Shopify plan.
Third-Party Payment Providers: If using third-party providers, you'll incur transaction fees set by the provider, in addition to any third-party transaction fees by Shopify if not using Shopify Payments.
Managing Payment Processing
1. Authorization: Ensuring the customer's credit card is valid and has sufficient funds for the transaction.
2. Capture and Clearing: After authorization, capturing the payment allows it to be reviewed and processed by the acquirer and credit card company.
3. Funding: The final amount, after deducting necessary fees, is deposited into your merchant account.
Considerations for Shopify Merchants
- Choose Your Payment Providers Wisely: Assess the fees, rules, and payment flow of different providers to find the best fit for your business model and customer base.
- Monitor Your Payouts: Regularly check your payout schedule and bank account to ensure timely receipt of funds.
- Understand Fees: Be clear on the fees you'll pay for each transaction, including credit card processing fees or any third-party fees if not using Shopify Payments.
By effectively managing your payment options and understanding the process and timelines associated with each, you can streamline your cash flow, avoid unexpected fees, and ensure a smooth payment experience for your customers.