For any Shopify store, one of the fundamental steps in setting up the store is integrating a reliable payment gateway. How will you receive payment from your customers? How secure is the system?
These are some of the questions that should be on your mind when you plan to set up your store on Shopify.
Around 70% of customers abandon their carts, and one of the main reasons for it is the complicated checkout process. So, how do you ensure that you provide customers with a quick, easy, and painless checkout experience?
There are some important factors to consider when selecting a good payment solution for your Shopify store. But before that, let’s get to know more about e-commerce payment processing.
What are the parts of e-commerce payment processing?
The process of e-commerce payment is complicated. It involves payment gateways and processors.
Payment gateway
A payment gateway reads and relays the payment data from customers to the merchant’s bank account. They deliver the customer payment details entered on the merchant store to the payment processor.
Payment processor
A payment processor receives the payment details from the gateway, confirms if the customer has sufficient funds, and moves the money from the issuing bank to the merchant account.
Merchant account
This is a business bank account that lets the merchant’s store accept and process electronic payments from customers. The bank sets up an agreement specifying the terms for processing the payments.
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The bank charges a fee for each payment transaction.
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It establishes a fee structure with the payment processor.
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The bank also charges a monthly or annual fee.
Now that you know about payment gateways and providers in e-commerce payment processing, let’s see how a payment gateway works with a payment provider.
What is a payment gateway?
A payment gateway is a technology that enables Shopify merchants to receive online payments from their customers. It captures, stores, and transmits card information from the customer to the merchant, thereby acting as a middleman.
The payment process goes through a complex, multi-layered transfer, with each layer having its own standards of secured encryption and fraud detection. Since the payment gateways store and transmit customer card details, they have to be PCI DSS (Payment Card Industry Data Security Standards) compliant, which includes annual audits and recertifications.
A payment service provider (PSP) uses payment gateways to process online transactions. It provides digital payment services to merchants to help them accept and process online payments from their customers.
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What are the benefits of using payment apps in Shopify?
Both the merchant and the customer can be assured that the payment details are encrypted and kept secure during transmission.
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Anti-fraud measures
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Strong encryptions in place
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Approves customer payment data
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Delivers funds to the merchant account
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Simpler setup processes
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Flexible terms for payment processing
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Some have no upfront fees other than the processing fee
Using a payment app on Shopify is best for small businesses that process a very low volume of customer card payments and may not want to pay any upfront fees.
What are the cons of payment apps in Shopify?
Using a payment app may not be beneficial for brands and large enterprises when they are processing high volumes of online transactions.
The payment processors charge anything between 2% and 4% per transaction, and for high volumes, this may drain the merchant’s business profits.
Though Shopify payment apps are beneficial in many ways, it is up to the merchant to take care when choosing the best Shopify payment app for their store.
What are the factors to consider when selecting a payment app on Shopify?
There are a few factors to consider before you narrow down your choices to the best payment gateway provider. Also, the type of your business and its future vision must be considered.
1. Type of payment gateway
There are basically three ways to handle payment processing.
Redirect payment gateways
Here, the payment gateway takes customers from the merchant site to the payment gateway page. Once the payment process is complete, it redirects the customers back to the store. PayPal, Stripe, and Amazon Pay are examples of redirect payment gateway services.
Hosted or off-site payment gateways
In this, the customer’s payment details go to the payment service providers for processing. The Shopify POS (Point of Sale) is an example of a hosted payment service provider.
Self-hosted or on-site payment gateways
In this case, the servers on the merchant’s store process the payment information without redirecting it to the payment processor site.
A self-hosted payment gateway requires investment in security and technology tools. This is best for large enterprises. Small enterprises or startups can go with the redirect payment gateways.
2. Pricing
The transaction fee is an important factor to consider when selecting a good Shopify payment app. It is better to compare the processing fees for the best payment apps and see which fits your budget. A high processing fee may hit your profits. Some apps charge setup fees, while others charge an additional monthly or annual fee. Some even charge if a particular transaction volume isn’t met.
3. Efficiency
The payment app should make the checkout process easy for customers without having to fill in too many details. Also, it has to provide a checkout experience optimized for different device screen types. This will be particularly helpful when you plan to build a mobile app for your Shopify store.
The no-code app builder Swipecart helps you design apps for your Shopify store in minutes without having to code even a single line. You can easily integrate your store’s payment service providers into your Swipecart app to provide customers with the same engaging shopping experience.
Also, Swipecart allows you to opt for a Shopify native checkout so that you can use customer account details from the store on your app. With this, you provide customers with a fast and easy checkout experience on the app.
Another feature you need to look into is the number of payment types it supports. If you are planning to go global, ensure that it supports many international currencies. If you are a service-based business like Netflix, consider if the payment app supports recurring billing.
4. Payment transfer
Some Shopify payment apps take more than 7 business days for the money to reflect in the merchant’s business account, while others take only 1-2 days. If this is an issue for your business, you need to consider which of the payment apps transfers the money faster to your account. Also, read the chargeback policy, as some apps are known to freeze such payments for 60-75 days. These apps have strict compliance policies and any doubtful payments are held back until the issue is resolved. Prefer apps that have a seller protection program in place to cover the chargeback fees.
5. Strong customer support
All popular Shopify payment apps provide good customer support service, but some provide instant live chat services. If you are a non-technical person, select the one that responds quickly to customer calls, as talking and resolving the issue would be easier for you than raising a ticket through email or following the manual instructions.
What are the best 5 Shopify Payment apps to use in 2023?
Now, let’s see the 5 best Shopify payment apps to consider for your online store in 2023.
1. Shopify Payments
Shopify Payments, owned by Shopify and powered by Stripe, is the best payment solution for Shopify and Shopify Plus store owners. It automatically collects the payments made by customers and deposits them in merchant accounts within 3 business days.
If you want to receive your payments in bulk, you can adjust your store payout settings to weekly or monthly transfers.
Shopify Payment pricing
It has zero transaction fees, no matter the payment method selected by your customer. But you still have to pay the card processing fee. But the caveat here is that you have to subscribe to a Shopify plan to use Shopify Payments. The Shopify plan can cost between $30 for basic to $300 for advanced.
Pros of Shopify Payments
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Its interface is easy to set up and can be integrated seamlessly without going back and forth between third-party payment providers.
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Just like other payment providers, it offers your customers diverse payment options.
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It provides a free card reader for physical payments.
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It charges lower credit card transaction fees when you choose to upgrade your Shopify subscription plan.
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It allows real-time monitoring of the customer’s payments.
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Its checkout process is fast and easy, helping you improve customer satisfaction.
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It has advanced security features to ensure the safety of the customer’s payment details.
Cons of Shopify Payments
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Shopify Payments is not available worldwide. It is taking time to expand because of the country-specific compliance and regulatory requirements.
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The merchant gets billed $15 for every chargeback. Moreover, Shopify may withhold your money temporarily while they resolve the chargeback issues.
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It has strict compliance policies, and if you don’t abide by them, it retains the right to revoke the approval of your account.
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If it investigates suspicious activities, transactions, disputes, or even chargeback mistakes, it suddenly freezes the movement of funds into your account.
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It prohibits the sale of some products, including virtual currency, gambling, investment or credit services, adult content, illegal goods, drugs, or services related to these.
2. PayPal
The next best payment option after Shopify Payments is PayPal. It has been one of the leading payment solutions for decades. Owners can prefer it if they are looking for an alternative to Shopify Payments.
Paypal pricing
PayPal is a third-party payment provider for Shopify. If you are selling in the US, charges are 2.9% of the transaction amount plus an additional 30 cents flat fee. When receiving payments from outside of the US, the fee is 4.4% of the transaction plus a fixed fee based on the country’s currency.
Pros of PayPal for Shopify
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It is a trusted method of payment for your Shopify store.
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It integrates seamlessly with your Shopify store without many technicalities. It is easy to register, set up, and link your business account.
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It offers the highest level of encryption, making it a safe and secure payment solution.
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It accepts different forms of digital currency and has simple invoicing capabilities.
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It has a seller protection program to cover the chargeback fees.
Cons of PayPal for Shopify
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The fund transfer to your business account can take up to five days.
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Its seller protection does not cover digital goods.
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The international currency conversion rates are comparatively higher.
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Merchants cannot set it up as a hosted gateway. You have to redirect customers to its site to complete the transaction.
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It also has higher transaction fees, which may cut into your bottom line.
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Also, the dispute resolution process is less efficient when a claim arises. It may take up to 75 days for a decision, which means your funds are withheld until that period. It also charges you $20 in chargeback fees.
3. Stripe
Stripe is a standalone third-party payment provider for Shopify with a customizable API for integration. It is a popular choice for B2B and service-based businesses as it has lower transaction fees and offers subscriptions and recurring billing services when compared to other third-party payment providers. It also offers a pay-as-you-go pricing structure, which is why it is the first choice for businesses just starting out.
Stripe pricing
The Shopify add-on transaction fee is 0.5% to 5%. Stripe charges you 2.9% plus a fixed 30 cents for transactions. It also charges an additional 1% plus 30 cents for international payments and 1% if currency conversion is required. It charges you an additional 0.4% to 0.8% for recurring subscription transactions. Its in-person transaction fee is 2.7% plus a fixed 5 cents.
Pros of Stripe for Shopify
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Easy to use and customize. It allows developers to control the interface of the entire payment process.
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It has no monthly fees. It supports 135+ currencies and is active in 30+ countries.
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It implements an ML-based anti-fraud system called Radar to secure payments.
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It integrates with your Shopify store and POS systems.
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It offers high-volume discounts.
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Stripe makes it easy to run reports, so you can easily view, manage, and analyze your revenue.
Cons of Stripe for Shopify
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Fund transfers to the merchant account can take 7-14 days.
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It charges $15 in chargeback fees. Plus, there are lots of additional fees for features.
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It’s not easy to set up when compared to Shopify Payments.
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It offers limited in-person payment processing.
4. Authorize.net
Authorize.net, which is owned by Visa, is a payment service provider that assists small companies in accepting payments online on Shopify. While Stripe is better for small businesses with an international customer base, Authorize.net is best for those who do not want to deal with multiple add-ons and customizations.
Authorize.net pricing
Authorize.net offers two different payment processing plans. One is a payment gateway, and the other is a combination of a payment gateway and a merchant account. It charges a monthly fee of $25 for each of the plans. It charges 2.9% plus 30 cents per transaction with the merchant account.
Pros of Authorize.net for Shopify
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It accepts card payments, electronic checks from bank accounts via the Shopify store or the Authorize.net virtual terminal, mobile payments, and even by manually entering payment information into the Authorize.net virtual terminal.
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Accept and manage recurring and subscription-based payments.
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Advanced fraud detection with customized rule-based filters.
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Allows you to import settled transactions directly into your accounts.
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Merchants can create multiple user accounts with certain permissions for each.
Cons of Authorize.net for Shopify
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It supports relatively few international currencies.
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It has no setup fees but a $25 monthly gateway fee, which is quite significant for small businesses.
5. Amazon Pay
Amazon Pay is Amazon’s answer to a secure third-party payment solution for Shopify. Customers of your store can use the payment information stored on their Amazon accounts for a faster checkout process.
Amazon Pay pricing
Amazon Pay charges 2.9% per transaction plus a fixed 30-cent fee for payments in the US. For international payments, it charges 3.9% plus 30 cents. Shopify charges an additional 2% per transaction when you use Amazon Pay as the payment solution for your store.
Pros of Amazon Pay for Shopify
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By using their Amazon account, customers can pay for their orders without having to enter the details in the checkout form. It is prepopulated with details from their saved card details on Amazon.
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Quick and secure checkout process.
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It accepts wallets, online payments, mobile, and even Alexa Voice Payments.
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It offers one of the best merchant protection and fraud detection solutions.
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Disbursements are processed daily and take around 1-2 days to reflect in the merchant’s bank account.
Cons of Amazon Pay for Shopify
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The chargeback fee is quite high, at $20.
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It doesn’t support Shopify POS.
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It supports fewer international currencies than Shopify Payments and PayPal, which support over 100.
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It offers one of the best merchant protection and fraud detection solutions.
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A buyer must have an Amazon account to use Amazon Pay.
Better checkout and payment processing with Swipecart
These are the best five Shopify payment apps to consider for your store in 2023. If you are planning to provide a personalized and better shopping experience to your customers, we recommend setting up a mobile app for your Shopify store through the no-code app builder Swipecart. It has advanced features to offer your customers a seamless payment processing and checkout process.
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The Shopify Native Checkout plugin provides customers with a Shopify checkout option within the app.
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Provide customers with flexible payment options with the COD Verification plugin.
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Customers can pay in their local currency with the Multi Currency plugin.
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Buy Now Pay Later integrations like, Klarna, Affirm, Shop Pay, Zip, Clearpay, and AfterPay.
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Apple Pay integration allows customers to pay from their Apple Pay account.
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Recharge Subscriptions integration to set up recurring billing for your store.
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Google Address Autocomplete or Shopify Address Autocomplete integration tools automatically populate checkout forms for easier and faster checkout processes.
Include these and many other features on your app to help you boost conversions and make better profits for your online business.
Wrapping Up
Offering more payment alternatives and helping them check out faster helps you generate positive customer experiences and build trust. So, whether you have just opened your store on Shopify or are planning to grow your business through a mobile app for your Shopify store, choose the best payment method that brings you the most benefits.
