Get to Know the Best Shopify Payment Gateways in 2024

sBriefing the Best Shopify Payment Gateways in 2024

Payment gateways are essential to every online store. With Payment gateways, it gets easier to perform seamless customer transactions. Payment systems make the most important part of any Shopify development services online store giving. This gives audience the ultimate ease of performing transactions online.

With online payment, the transfer of transaction between your business and your customers happens securely. Therefore, if you need assistance selecting the ideal payment gateway for your Shopify store, this guide is here to help.

The write-up will brief and explain the most popular Shopify payment gateways in 2024. This will also provide information on how these payment gateways can enhance your business operations.

Let’s find out more about these solutions for your online store and boost your payment processing capabilities. However, before we go further, let’s understand in detail what is a payment gateway.

What is a Payment Gateway?

A payment gateway enables retailers to securely gather customer financial information. This information includes credit card numbers and billing addresses of customers. This information is further transmitted to the processor that moves the funds from the customer’s account to the retailers.

There are various payment gateways available, each offering unique advantages and potential drawbacks. These gateways are crucial for processing transactions in any ecommerce store. Without them, merchants would be unable to accept or handle customer payments effectively. Therefore, choosing the right payment gateway is critical to ensuring secure, efficient, and seamless financial transactions for your online business.

Payment gateways have key functions that make them rewarding to use. Here are the most important features.

Key Functions of a Payment Gateway:

• Authorization of Customer’s Bank: Verifies and approves the transaction with the customer’s bank to ensure the availability of funds.
• Encryption of Sensitive Information: Secures customer data, such as credit card details and personal information, through advanced encryption methods to prevent unauthorized access.
• Transaction Processing: Manages the entire transaction process, ensuring a smooth and efficient transfer of funds.
• Transfer of Funds to Merchant’s Account: Facilitates the transfer of money from the customer’s account to the merchant’s account, ensuring timely payments.
• Provide Detailed Transaction Reports: Generates comprehensive reports on all transactions, providing merchants with valuable insights and data for financial tracking and analysis.

What to Look When Choosing a Payment Gateway for Your Business?

Pricing Structure of Payment Gateway

Cost is a critical factor in choosing a payment gateway. The cost directly impacts your profit margins and product pricing. When comparing options, consider not only the per-transaction rates but also any monthly fees that some payment processors impose. Determine whether a higher transaction rate with no monthly costs is more economical for your business compared to a lower rate with an additional monthly fee.

Each payment gateway has its own pricing structure, and Shopify does not charge a fee for integrating with a payment gateway. As one size fits all solutions will not be the ideal scenario for all businesses, therefore choosing the right option becomes the most critical. In such a scenario, review all available providers, assess their functionalities, and determine how well each aligns with your specific business needs.

While choosing the payment gateway, keep in mind that transaction fee for different platform will differ. The payment may include processing fee, setup fee, monthly fee and me.

International expansion

Ensure you choose a Shopify payment gateways that meets your current market needs. Make sure it has the potential for international expansion. While you might only be trading in any particular country right now, researching and preparing for future growth can benefit your business. this helps businesses when they consider expansion in the long run.

By selecting a Shopify payment option that is versatile in nature, you can seamlessly expand your reach. This also provides the opportunity to tap into global markets. Being business ready ensures future-proofing your online store.

Choosing an Option Available at Your Location

When selecting a payment gateway, your location is the first crucial factor to consider. Some payment gateways operate exclusively in certain regions, so it’s essential to verify which ones are available to you. Additionally, consider the geographical location of your target audience to ensure seamless transactions. For a comprehensive list of available payment gateways in your region, check out Shopify’s resources. This will help you choose the most suitable option for your business needs and your customers’ convenience.

Set Up Time

The setup time for payment gateways can vary significantly between providers. For instance, PayPal can be operational in under a day, while Sage Pay might take around 4-5 weeks to fully integrate. Therefore, it’s crucial not to postpone selecting or setting up your payment gateway until your online store is complete.

In such a scenario, what options do you have? There are numerous providers available. This article will explore the pros and cons of some of the top choices for Shopify merchants of all sizes. This will help you make an informed decision that aligns with your business needs and timeline.

Competition Analysis

Regularly monitor which Shopify payment gateways your competitors are using. This is much important to gain insights into what works well for their businesses. Analyzing their choices can provide valuable information and may inspire you to upgrade to a more efficient payment gateway. This overall enhances your customer experience.

Staying informed about industry trends and competitor strategies helps you make informed decisions. This further helps to keep your online store competitive and customer-friendly.

Popular Payment Gateways for Shopify in 2024

Shopify Payments

If your ecommerce store is on Shopify, their own payment platform, Shopify Payments, is definitely worth considering. It eliminates the hassle of setting up a third-party provider and is pre-configured to accept major payment methods.

Key Benefits of Shopify Payments:

1. Seamless Integration: Shopify Payments integrates directly with your Shopify admin, allowing you to view all transaction details in one place. In contrast, third-party gateways require you to manage transactions through separate admin areas.
2. Cost Efficiency: With Shopify Payments, you only pay the card rate, avoiding the additional subscription transaction fees that come with third-party payment providers. Stores using third-party gateways incur both Shopify’s subscription transaction fees and the credit card fees charged by the third-party provider.
3. Quick Setup: The setup process is straightforward; simply fill out a form and you’re ready to go. This quick start allows you to begin accepting payments almost immediately.
4. Timely Payouts: Payments typically take up to 3 business days to reach your account, ensuring a reliable cash flow for your business.
5. Free Card Reader: Shopify Payments includes a free card reader, enabling you to accept physical payments, which is especially useful for omnichannel retailers.

Shopify Payments is tailored for Shopify merchants, offering numerous features that enhance both efficiency and cost-effectiveness. It’s a robust solution for handling your store’s transactions with ease and reliability.

Cons of Shopify Payments

Limited Availability: Shopify Payments is not available in all countries.

Risk of Fund Holds: Shopify may temporarily hold funds or terminate accounts if fraudulent activity is suspected or if a merchant violates their terms of service.

Basic Support Services: Support services are basic and may not meet all your needs.

Limited Customization: Offers fewer customization options compared to some third-party gateways.

Platform Lock-In: Shopify Payments is tied to the Shopify platform. Switching to a different ecommerce platform will require setting up a new payment gateway.

Additional Fees: Merchants not using Shopify Plus incur extra fees for transactions made through third-party payment gateways.

PayPal

Payment gateways discussion is not completed without mentioning PayPal. It is the most popular and trusted payment option for merchants and users alike. This payment gateway has grown significantly in all these years.

Setting up PayPal is quick, taking less than a day, and it offers both free and paid merchant account options. Additionally, PayPal provides robust support to help you resolve any issues.

PayPal is one of Shopify’s default payment providers. When you open a Shopify store, a PayPal Express Checkout account is automatically created using the email you registered with. Once you set up your PayPal account, you can start collecting payments for orders made via PayPal.

Transaction fees apply each time a customer makes a purchase using PayPal, unless you also activate Shopify Payments. With Shopify Payments enabled, you avoid transaction fees on orders for stores located in most countries.

Key Features of PayPal

Transaction Fees: You’re charged 2.9% + $0.30 per transaction, which should be considered when calculating your margins.

Mobile-Optimized Checkout: Provides a seamless checkout experience on mobile devices.

International Payments: Accepts payments from customers worldwide.

Direct Payments: Allows customers to pay directly through their PayPal accounts.

Cons of PayPal

Separate Setup and Checkout Process: Requires a separate setup and checkout process compared to integrated solutions.

Basic Customer Support: Offers basic customer support, which may not meet all merchant needs.

Additional Transaction Fees: Charges additional transaction fees per purchase.

Higher Transaction Fees: Incurs higher transaction fees compared to some other payment gateways.

Risk of Account Holds: PayPal may temporarily hold or freeze accounts in cases of suspected fraud or unusual activity.

Limited Customization: Provides limited customization options for payment processes.

Limited POS Integrations: Offers limited integrations with point-of-sale (POS) systems.

Stripe

The integration between Shopify and Stripe provides merchants with a seamless way to set up payments for their online stores. Known for its popularity, Stripe integrates smoothly with Shopify, offering a transparent pricing structure and versatile features like recurring billing and direct debits.

Stripe Pricing Details:

No Setup or Monthly Fees: Unlike many other providers, Stripe does not charge setup or monthly fees.

Transaction-Based Pricing:

– Online Payments: 2.9% + $0.30 per transaction.

– In-Person Payments: 2.7% + $0.05 per transaction.

Stripe’s simple and easy to use pricing and robust features make it a preferred choice for Shopify merchants looking to efficiently manage payments and enhance their customer experience.

Cons of Strip

• Additional Charges for Chargebacks and Refunds
• Technical Expertise Required
• Complex Setup Process
• Risk of Account Holds
• Basic Support Services
• Limited Availability

Amazon Pay

Many consumers already have Amazon accounts, making Amazon Pay a convenient option for them. Being a platform that offers ease of use, customers can easily use their trusted details to make purchases quickly on your store. Integrating Amazon Pay into your active Shopify store is simple and not much technical. However, it requires an Amazon Professional Seller account to start.

With a familiar and trusted payment experience for customers, Amazon enhances convenience. However, merchants should weigh the costs and processing times against the benefits of customer trust and streamlined checkout experiences.

Amazon Pay Benefits

Consumer Trust: Customers can utilize their familiar Amazon account details for seamless transactions.

Merchant Fees: Amazon Pay’s fees can be significant for low-volume merchants and should be carefully evaluated.

Payment Processing Time: Funds from transactions made through Amazon Pay may take several days to reach your account.

Cons of Amazon Pay

• High Transaction Fees and Additional Charges
• Customer Data Control by Amazon
• Limited Customization Options
• Basic Support Services

These factors should be carefully weighed when considering Amazon Pay as a payment gateway for your Shopify store. Understanding these aspects helps in making an informed decision that aligns with your business goals and customer expectations.

Square

Square has surged in popularity in recent years as a versatile payment processor. The platform is one favorite to companies offering Shopify development services. The popularity is surging because Square caters to both online and offline transactions through POS hardware.

You can seamlessly integrate Square with your ecommerce store and physical shop. It allows integrating inventory management on one dashboard. This integration enhances efficiency by synchronizing your operations across different sales channels.

Square is also popular because of its merchant-friendly features. This helps businesses to accept various transaction types such as donations, membership fees, and booking fees for appointments. This flexibility supports diverse business models and revenue streams.

Benefits of Square

• There’s no initial setup fee to start using Square
• Square charges a competitive 2.9% fee per transaction, plus $0.30
• Square’s user-friendly interface and robust capabilities make it a preferred choice for businesses

Cons of Square

• The platform has costly transaction fee
• Added POS hardware cost
• Customer support (basic)

Shopify has more payment gateways that are equally rewarding as the ones mentioned here. However, which platform will suit the best for your store will solely depend on the requirements of any particular Shopify platform. In case, you are looking for Shopify development or Shopify maintenance services, you can contact IDS Logic. We have experience developers’ team to offer exceptional services.