Payments faq

Payment options available on Shopify 

If a payment method is available in your country, you will find it in the Payments section of your Shopify admin. Make sure that your store address is correct under Settings> Store details, and that it matches your business address. You can then search for an available provider under Payments.  

Your store’s currency may also influence the selection of payment options available to you. For example, PayPal is available in most countries in the world, but only in a few dozen currencies. If your business is in a country where PayPal is available, but you are selling in an unsupported currency, you won’t find PayPal as an available option. 

Most online stores offer credit card payment options, and on Shopify you can connect a wide range of payment providers that allow you to accept credit cards. Shopify Payments is the simplest way to accept credit card payments on a Shopify store, without the need to establish a relationship with an external provider. If Shopify Payments is not the right solution for you, or your business is not eligible to use it, you can also connect to all the supported third-party credit card payment providers, and many local and specialized providers.     

On Shopify, you can also accept wallet payments through providers like PayPal, Apple Pay, and Google Pay. These methods are often the preferred choice for customers, as they offer increased convenience, speed, and security. On Shopify, wallet payment options are referred to as accelerated checkouts, because they allow customers to their payment and shipping information and quickly complete payment for their orders. Find out more here.  

You can also enable Manual payment methods, for use cases where you arrange to receive payments outside of Shopify (e.g. cash on delivery, money orders, or manual bank transfers). 

 

Key payment concepts

 When making decisions about accepting payments on your online store, it is important to understand some key concepts. 

Authorization and Capture

When a customer makes a payment using a credit card, they give authorization for their credit card to be charged the transaction amount. The payment information needs to be captured and sent to their bank for processing. 

As a merchant, you can choose whether your Shopify store is configured to authorize and capture the payment when the order is placed, or only authorize the transaction. This decision might depend on internal or external requirements. For example, you might be required to capture the payment only when you are ready to ship the product: in this case, you will choose to capture the payment after the initial authorization.

The authorization period is the timeframe within which a payment can be captured. The length of the authorization period depends on the payment provider you use. Find out more about credit card authorization and capture here.  

Risk and Compliance

Every payment provider will impose certain requirements on merchants, based on their risk tolerance and the regulations they need to abide by, which might be in turn imposed by partner institutions or governments. This translates into a list of acceptable business models and products merchants are allowed to sell, countries and currencies where a payment provider can operate, and documents that you’re required to provide to open an account and keep it in good standing. You can generally find these terms on your payment provider’s website. Because every merchant’s situation is different, it’s important to check your eligibility and start to set up an account with a new provider as soon as possible, to ensure that you’re ready to accept payments when you want to launch your new store. 

Disputes and Fraud

In commerce, and especially when payments happen online, it’s common that a customer may have an issue with a transaction they find on their account statement.  

Customers can initiate chargebacks by contacting their issuing bank and filing a complaint related to one or more transactions on their statement. Issuing banks file chargebacks within four general categories:

• Technical, e.g. payment processing error
• Clerical, e.g. incorrect amount or refund not issued
• Quality, e.g. item not received or damaged
• Fraud, e.g. stolen financials or identity theft

Merchants who receive a chargeback are, in most cases, allowed to provide supporting documentation to dispute them. Merchants also generally incur a fee related to the processing of the chargeback. If you use Shopify Payments, the fees are listed here. 

Digital payment wallets, like PayPal, may have similar processes to dispute a transaction or report a fraudulent payment. 

While they can’t be completely avoided, fraud and disputes can be prevented by implementing internal processes to review and cancel suspicious transactions, and to ensure quality of your products and timeliness of your deliveries. 

Fees and Payouts

Whether you’re using Shopify Payments or a third-party provider, there will be fees associated with payment processing, currency conversion, or even monthly fees for account maintenance. Regardless of the provider you choose, make sure that you have a clear understanding of the fees that will apply to you. 

Another important aspect to consider are payouts. Typically, payment providers will pay out to your bank account either a lump sum on a set schedule, or, less commonly, deposit each transaction directly. Some providers give the option to receive payouts in multiple currencies, while others convert all currencies into one. Also, some providers will invoice you for the fees, while others will pay out the net amount after retaining their fees. As payouts can have a significant impact on your business’s cash flow and the fees you pay for processing, make sure that you discuss with the providers you’re considering how payouts will be made, how frequently, and in what currency. 

Strong Customer Authentication and 3D Secure

Especially if you’re selling in the European Economic Area (EEA), you may have heard of the revised Payment Services Directive (PSD2), a regulation that mandates the need for Strong Customer Authentication (SCA) for customers in the EEA. You can read more about it in this blog post. If you are required to or want to enforce SCA, often enabled with a 3D Secure technology, you should make sure that your payment provider’s integration with Shopify can support it. Shopify Payments and Stripe support 3D Secure out of the box. Other payment providers support it through an additional integration with CardinalCommerce, or by having an external integration. Others might not support it.