For every online store owner, choosing the right payment solution is critical to success—and for Shopify merchants, Shopify Payments stands out as one of the most seamless options available. But what is Shopify Payments exactly, and how does it compare to other payment gateways?
In this guide, we’ll break down everything you need to know about Shopify payment processing, from setup requirements and supported countries to fees and third-party alternatives. Whether you’re just starting out or looking to optimize your existing setup, understanding Shopify’s built-in payment system can simplify your operations and help you avoid unnecessary transaction costs.
By the end of this post, you’ll have a clear grasp of Shopify Payments requirements, how to activate it, and whether it’s the right fit for your business. Let’s dive into the complete overview of Shopify’s payment processor and how it fits into your overall eCommerce strategy in 2025.
What Is Shopify Payments?
Shopify Payments is Shopify’s built-in payment processor that allows merchants to accept credit card payments directly without the need to integrate a third-party provider. It eliminates the extra step of setting up an external payment gateway, streamlining the checkout experience for customers and simplifying back-end operations for store owners.
When you enable Shopify Payments, your store can start accepting major payment methods like Visa, Mastercard, American Express, Discover, Apple Pay, and Google Pay—all without needing to configure separate payment providers.
Key Benefits of Using Shopify Payments:
No third-party transaction fees: Unlike other payment processors, Shopify waives its transaction fees (up to 2%) when you use its own payment system.
Faster payouts: Shopify Payments typically offers faster payout times, often as soon as two business days depending on your country and bank.
Integrated dashboard: All payment information, refunds, chargebacks, and analytics are managed directly from your Shopify admin panel.
Supports multiple currencies: Ideal for international sellers targeting global markets.
In short, Shopify Payments helps reduce friction for both store owners and customers by offering a native, streamlined solution.
How Shopify Payment Processing Works
Shopify Payment Processing is designed to be seamless, fast, and efficient—integrating directly into your store’s backend. Here’s a step-by-step breakdown of how it works behind the scenes:
Customer Checkout
When a customer visits your store and proceeds to checkout, they’re given multiple payment options. If Shopify Payments is enabled, it appears as the default method—accepting all major credit/debit cards, Apple Pay, Google Pay, and more.
Transaction Authorization
Once the customer enters their payment details and submits the order, Shopify Payments authorizes the transaction. This means the system checks if the card is valid and if funds are available.
Payment Capture
After authorization, Shopify captures the payment (either automatically or manually, based on your settings). At this point, the funds are officially processed and held for payout.
Payout to Merchant
Funds from each transaction are bundled and sent to your linked bank account. Shopify offers a payout schedule (usually every 2–3 business days), though this may vary by country.
To view your Shopify payout information, you can:
- Go to your Shopify admin
- Select “Settings”
- Select “Payments”
- Select “View payouts”
Order Status Updates
Shopify automatically updates your order status, marking it as “Paid” and allowing you to proceed with fulfillment. Everything is recorded in your Shopify dashboard for easy tracking.
Fees Deducted Automatically
The applicable Shopify Payments fees (based on your plan and region) are deducted before payout. These include credit card processing fees and any applicable taxes.
Key Features of Shopify Payment Processing:
Built-in fraud analysis to help flag suspicious transactions.
Support for recurring billing (with apps) for subscriptions.
Chargeback management with access to evidence submission directly in the dashboard.
Why Use Shopify Payments Over Third-Party Providers?
Choosing Shopify Payments over a third-party provider offers several key advantages—especially when it comes to simplicity, cost-effectiveness, and user experience.
Seamless Integration
Shopify Payments is built directly into the platform. That means no external setup, no redirects during checkout, and no added friction for customers. Everything—from order management to financial tracking—is centralized in your Shopify dashboard.
Lower Transaction Fees
Using third-party payment gateways like PayPal or Stripe often comes with additional transaction fees charged by Shopify (up to 2% depending on your plan). Shopify Payments eliminates these extra charges, helping you keep more of your profit.
Faster Payouts
Third-party gateways typically have longer payout schedules or manual steps involved. Shopify Payments automates payouts directly to your bank—often within 2 business days.
Enhanced Checkout Experience
Because the entire process stays on your site, customers enjoy a smooth, secure checkout experience with fewer steps and no redirections—leading to higher conversion rates.
Unified Support & Analytics
Shopify Payments lets you manage payment issues, refunds, and chargebacks right from your admin panel. You also gain access to detailed reports, including fees, payouts, and taxes.
Advanced Fraud Detection
Built-in fraud analysis tools monitor transactions and flag suspicious activity—giving you peace of mind without extra integrations.
Shopify Payments Fees Explained
Understanding Shopify Payments fees is crucial to accurately pricing your products and managing your profit margins. The total fees you pay depend on your Shopify plan, the payment method used, and the location of your customer.
Credit Card Processing Fees
Shopify charges a standard credit card rate per transaction, which varies by plan:
Basic Shopify: 2.9% + 30¢ per online transaction
Shopify: 2.6% + 30¢ per online transaction
Advanced Shopify: 2.4% + 30¢ per online transaction
In-person (POS) transactions typically have lower rates.
No Additional Transaction Fees
If you’re using Shopify Payments, you won’t pay additional transaction fees (unlike when using third-party gateways). This can save you up to 2% per sale depending on your plan.
International & Currency Conversion Fees
Selling to customers outside your base currency? Shopify Payments may charge a currency conversion fee—typically 1.5% for international sales. This is applied when converting the customer’s payment into your payout currency.
Chargeback Fees
If a customer disputes a charge, Shopify charges a $15 chargeback fee (varies by country). However, you can submit evidence to dispute it.
Payout Fees
There are no payout fees when transferring funds to your connected bank account—Shopify handles this automatically every business day (or according to your custom payout schedule).
Countries Where Shopify Payments Is Available
Shopify Payments is only available in select countries due to legal, banking, and compliance requirements. If you operate in a supported country, you can activate Shopify Payments directly from your dashboard without needing to set up a third-party provider.
Supported Countries (as of 2025):
United States
Canada
United Kingdom
Australia
New Zealand
Ireland
Germany
Spain
Italy
France
Netherlands
Belgium
Sweden
Denmark
Austria
Japan
Singapore
Finland
Portugal
Hong Kong SAR
Czechia
Romania
(Note: The list may expand over time — always check Shopify’s official documentation for the latest updates.)
What if your country isn’t supported?
If your country isn’t on the list, you’ll need to use a third-party payment provider like PayPal, Stripe, or 2Checkout. Keep in mind, third-party gateways may include extra transaction fees and may not offer the same seamless integration as Shopify Payments.
Shopify Payments Requirements
Shopify Store Setup
Before you can use Shopify Payments, you must have a Shopify store that meets certain criteria:
You must have an active Shopify subscription.
Your store must comply with Shopify’s terms of service and acceptable use policy. Violating these terms may result in payment processing suspension.
Supported Payment Methods
Shopify Payments supports a variety of payment methods for your customers, but you must ensure that your store is configured to accept them. These payment methods include:
Credit and Debit Cards: Shopify Payments supports all major card networks like Visa, MasterCard, and American Express.
Shop Pay: A one-click checkout solution for faster payments.
Apple Pay & Google Pay: Mobile wallet payment options that increase conversion rates for mobile shoppers.
Manual Payment Methods: These can be set up for offline payments (bank transfers, cash on delivery, etc.), but they are outside of Shopify Payments’ direct processing.
Business Information
To ensure the legitimacy of your business, Shopify Payments requires:
Business details: You must provide information about your business structure, such as whether you are a sole proprietorship, corporation, or partnership.
Bank account information: For receiving payments, you must link a valid business bank account in the country your store is based. Shopify Payments will transfer funds to this account after deducting transaction fees.
Tax details: Shopify Payments will require tax-related details, including your taxpayer identification number (TIN) or employer identification number (EIN), depending on your country.
Adherence to Local Laws & Compliance
Shopify Payments complies with laws specific to each country. Your store must:
Follow the local tax rules.
Comply with anti-money laundering laws and KYC (Know Your Customer) regulations.
Products you sell must comply with the Shopify Acceptable Use Policy.
Shopify Payments Restrictions
Certain businesses may be restricted from using Shopify Payments due to the nature of their products. Shopify Payments has specific restrictions for certain industries, including:
Adult content or services
Gambling or adult games
Alcohol and tobacco products
Weapons and ammunition
How to Set Up Shopify Payments on Your Store
Setting up Shopify Payments on your store is a straightforward process, and once activated, it simplifies the way you receive payments and process transactions. Here’s a step-by-step guide to help you set up Shopify Payments:
Sign in to Your Shopify Admin Panel
To begin the setup, log into your Shopify Admin Panel using your credentials. This is where you’ll manage all aspects of your store, including your payment options.
Navigate to the Payment Settings
From the Admin Panel, go to the Settings section at the bottom left of the screen.
Click on Payments. This will bring you to the page where you can configure payment settings for your store.
Choose Shopify Payments
On the Payments settings page, you will be given a list of available payment gateways. To use Shopify Payments, simply locate the Shopify Payments option and click Activate Shopify Payments.
Fill Out Your Business and Bank Account Information
After selecting Shopify Payments, you will need to provide the following details:
Business Information: Enter your business type (individual, corporation, partnership, etc.), address, and phone number.
Bank Account Information: Provide the details of the bank account where you want to receive payouts. This includes your bank’s name, account number, and routing number. Shopify will deposit the payments to this account after deducting any transaction fees.
Complete Tax Information
Depending on your location, you may be required to provide tax information, such as your Taxpayer Identification Number (TIN) or Employer Identification Number (EIN). This ensures that Shopify complies with tax regulations in your country.
Set Up Your Payment Methods
You will also be prompted to select the payment methods you want to offer your customers, such as:
Credit Cards (Visa, MasterCard, American Express)
Shop Pay (for quicker checkout)
Apple Pay, Google Pay, and other digital wallets
Manual Payment Methods (Cash on Delivery, Bank Transfers, etc.)
If you want to accept payments in multiple currencies, Shopify Payments supports this as well, but you’ll need to configure multi-currency settings under the Payments section.
Review & Complete the Setup
Once you’ve filled in all the necessary information and selected your payment methods, review all the details and click Complete Setup. Shopify Payments will now be enabled on your store.
Test Your Payment Gateway
Before launching your store fully, it’s a good idea to test your payment gateway to ensure everything is working correctly. You can do this by making a small test purchase using a valid credit card or through the Shopify Payments Test Mode (available under Settings > Payments).
Things to Keep in Mind During Setup
Compatibility with Shopify Plan: Shopify Payments is available to all Shopify plans, but availability may vary depending on your country.
Country Availability: Shopify Payments is only available in certain countries. Ensure your country is eligible before setting up.
Transaction Fees: Shopify Payments allows you to avoid third-party transaction fees, but Shopify charges a processing fee per transaction depending on your plan. Be sure to review these fees in your Shopify plan details.
Pros and Cons of Shopify Payments
Pros:
Seamless Integration
No Third-Party Setup: Shopify Payments is built into the Shopify platform, meaning there is no need for external payment processors or additional accounts.
Unified Dashboard: All transactions and payment data are displayed directly within your Shopify admin, offering a unified experience.
Lower Transaction Fees
Reduced Fees: Shopify Payments eliminates the extra transaction fees that are usually charged by third-party payment processors, such as PayPal or Stripe.
No Monthly Fees: Unlike third-party gateways, Shopify Payments does not have any setup or monthly fees.
Simplified Payment Setup
Easy Setup: Getting started with Shopify Payments is simple. Just enable it through the Payments section in your Shopify settings, and you’re ready to start accepting payments.
Multiple Payment Methods: Shopify Payments supports credit and debit cards, Apple Pay, Google Pay, and other local payment options, depending on your location.
Integrated Fraud Prevention
Advanced Security: Shopify Payments comes with advanced fraud protection tools that help minimize fraudulent transactions. It monitors transactions in real-time and automatically detects suspicious activities.
Support for Multiple Currencies
Multi-Currency Options: Shopify Payments allows you to sell in multiple currencies, making it easier for international customers to shop in their native currencies.
Faster Payouts
Faster Cash Flow: Shopify Payments offers quicker payout schedules compared to third-party processors, which can improve your business’s cash flow and operations.
Cons of Shopify Payments
Availability Restrictions
Limited Countries: Shopify Payments is not available in all countries. If your business is located in a country where Shopify Payments isn’t supported, you’ll need to rely on third-party gateways like PayPal or Stripe.
Conclusion
Understanding what is Shopify Payments is crucial for any merchant looking to simplify their checkout process and boost conversions on the Shopify platform. With its seamless integration, transparent fees, and reliable performance, Shopify Payments offers a powerful solution for handling transactions efficiently.
We hope this guide has helped clarify everything you need to know about Shopify’s payment processor—from setup to benefits and common issues. Now that you’re familiar with how Shopify Payments works, you’re one step closer to creating a smoother shopping experience for your customers.
Before activating, be sure to review Shopify’s terms, supported countries, and requirements to ensure compliance and avoid disruptions to your store.
FAQs
What is Shopify Payments, and how does it work?
Shopify Payments is Shopify’s integrated payment gateway, allowing store owners to accept credit card payments directly through their Shopify store. It eliminates the need for third-party payment processors, simplifying transactions and streamlining operations.
What are the fees for using Shopify Payments?
Shopify Payments has no monthly fees, but it charges transaction fees based on the plan you’re on (Basic, Shopify, Advanced). Additionally, there may be currency conversion fees for international sales. The fees are lower than those typically charged by third-party payment processors.
Can I use Shopify Payments if my store is in a country where it's not available?
If Shopify Payments is not available in your country, you’ll need to use a third-party payment processor like PayPal or Stripe. Shopify provides a list of supported countries where Shopify Payments is available.
How can I set up Shopify Payments on my store?
To set up Shopify Payments, go to your Shopify Admin > Settings > Payments. Choose Shopify Payments and complete the required information such as your bank details, business address, and tax information.
What payment methods does Shopify Payments support?
Shopify Payments supports credit and debit cards, Apple Pay, Google Pay, and other local payment methods depending on your region. It’s designed to provide a wide range of options for customers to pay seamlessly.
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