In the bustling realm of digitalization, where the world thrives on the wonders of online shopping, a shining star emerges Shopify. This mighty eCommerce platform reigns supreme, luring merchants with its powerful payment gateway. Yet, as the tale unfolds, a colorful cast of third-party processors enters the stage, tempting these merchants with their unique offerings. A grand decision looms, fraught with pros and cons. Will our brave merchants trust the stalwart Shopify gateway, or venture into the enticing unknown? The saga unfolds, and the destiny of their online businesses hangs in the balance.
- Pros and Cons of Shopify In-built Payment App
- Third-Party Payment Gateway
- Pros and Cons of Using Third-Party Payment Processors
Pros and Cons of Shopify In-built Payment App
|Convenience and Ease of Use.||Limited payment options|
|No Additional Transaction Fees.||Limited geographic coverage|
|Seamless Integration with Shopify Platform.||Risk of Account holds or shutdowns.|
|Available Customer Support||Fee for third-party gateways|
|Persistent Growth||Potential 30-day Payout Period|
Now, let’s understand the pros and cons of the Shopify Payment Gateway in a bit detailed manner.
Convenience and Ease of Use
With the help of Shopify Payment Gateway, it is incredibly easy and convenient. Removes the need for a third-party payment processor in your store, saving you time and simplifying things.
No Additional Transaction Fees
Shopify payment gateway doesn’t charge the users any additional transaction fees, beyond the standard credit card processing fees.
Seamless Integration with the Shopify Platform
The platform now comes with a Shopify Payment Gateway, that functions nicely with your Shopify Store and provides your consumers with a smooth checkout experience.
Available Customer Support
This is the best part about Shopify as they have 24/7 customer support which is always available and you can easily reach out to them and communicate with them via email, live chat, or either from the hotline offered by them.
The ultimate aim for any business is to grow, no matter what business size they have. And, the developers of Shopify are also giving their 100% to make their platform user interactive for the visitors.
Limited payments options
The Shopify payment gateway would only support a limited number of payment options which also include card details such as Credit card, Apple Pay, or Google Pay as well. But in case you want to access other payment methods, PayPal or cryptocurrency also, you’ll need to use a third-party payment processor.
Limited Geographic Coverage
Only a select few countries, such as Australia, Canada, Denmark, Germany, Hong Kong, and many others, can access the payment gateways which are offered by Shopify.
Risk of Account Holds or Shutdowns
Shopify also holds the funds or sometimes they shut down your account if they suspect any sort of fraudulent activity. While this is a rare occurrence, it can be disruptive to your business if it happens.
Fee for third-party Gateways
Although Shopify gives you the privilege to use its gateway, still there are certain businesses that prefer to use a third-party payment option, then Shopify will be going to charge more money with each transaction.
Potential 30-day Payout Period
For any business, the normal payout period is between 02-03 days, but in case you’re selling any “risky products”, you have to wait for at least 30 days. And, in case, it is applied in your business, then, Shopify will be going to let you know immediately.
Also read: Top 5 Payment Gateways in India
Third-Party Payment Gateway
As we discussed in the above section, selecting the right payment processor is important for getting success in your online store. Shopify is a popular eCommerce option for online merchants by using the Shopify platform, there are other third-party payment processors which are available and offer more flexibility and customization options.
Let us understand some of the very popular third-party payment processors, which include Paypal, Stripe, Square, Authorize.net, and Braintree. Before we proceed further let me clear out one thing, although there were other options also available out there, the reason to select them was that they are doing quite good compared to others and come with a value-for-money price point as well.
Paypal is one of the most well-known payment processors in the world, in a recent data study it is found that Paypal users on a global level are set to hit over 200 million in 2023 and internet users aged 14. It’s a popular choice for most online merchants because of its user-friendly interface. PayPal also offers fraud protection and chargeback assistance, which can be helpful for merchants.
Millions of companies irrespective of all sizes right from startups to Fortune 500 prefer to use Stripe when it comes to accepting payments and managing their businesses online. This payment gateway is popularly known for its flexibility and customization options, making it a popular choice for merchants who want to develop a unique checkout experience. Stripe also offers features like subscription billing and advanced fraud protection.
Square is a payment processor which is popular among most small and mid-sized businesses along with independent merchants. The best part is that it offers a variety of payment options, that includes credit cards, mobile payments, and also online invoicing. Square also has a user-friendly interface and provides its users with best-in-class features such as inventory management, Reporting and Insights, Payments protection, and much more that could turn out to be handy one.
Authorize.net was established in 1996 and fast forward now they have only one simple goal in their mind and that is to accept payments anytime, anywhere. Only one common thing is in mind and that is to accept electronic and credit card payments in person, online, or over the phone as well. The best part about them is that, till now, the company has more than 4,00,000+ trusted online merchants, handling more than 01-billion transactions successfully and more than $140 billion in payments every year. That’s Insane.
Braintree was established in 2007 with a clear goal and simple goal in mind and that is to offer a global commerce application that people need to build businesses, accept payments, and also enable commerce for all their respective users. Fast forwarding to now, online merchants in more than 45 countries are accepted and enable payments in more than 130 different types of currencies with Braintree.
Pros and Cons of Using Third-Party Payment Processors
Since the use of third-party payment processors is also increasing, that doesn’t mean that choosing them would be a vital option as you can also find some sort of problems in them which we will discuss in this section.
|Wide Range of Payment options||Additional Transaction Fees|
|Global Coverage||Requires some technical knowledge and expertise to integrate.|
|Competitive Transaction Fees||Potential for Security Breaches|
|Customizable checkout experience||Longer Payout Times|
|Potential for Lower fraud rates||Customers may experience checkout friction.|
Pros of Using Third-Party Payment Processors with Shopify
- Wide Range of Payment Options: Third-party payment processors offer a wider range of payment options which includes alternative payment methods like digital wallets, bank transfers, electronic bank transfers, and much more.
- Global Coverage: The third-party payment processors help you to process payments from all over the world, making them a great option for all those businesses having an international customer base.
- Competitive Transaction Fees: This is the best and highlighted part about them, as they provide a lower transaction fee rather than Shopify Payments, making a much more cost-effective option for businesses.
- Customizable Checkout Experience: The most attractive part about the third-party processors is that it offers you more customizable options for your checkout and payment processing, and allows businesses to customize the experience to all their specific needs.
- Potential for Lower Fraud Rates: Some of the Third-Party payment processors have advanced fraud prevention measures as they review each and every transaction and also run anti-fraud measures for your business.
Cons of Using Third-Party Payment Processors with Shopify
- Additional Transaction Fees: Third-party payment processors typically charge an additional transaction fee on top of the Shopify fees, which can add up over time.
- Requires some Technical Knowledge: When it comes to Integrating the third-party payment processor, it needs some sort of expertise as well to integrate with the Shopify store.
- Potential for Security Breaches: There could be a place where it can potentially expose your business and put them at high risk. It also causes businesses to have security breaches or hacks.
- Longer Payout Times: Well, it’s a bitter truth that sometimes it takes a longer time to transfer the funds to your account than compared to Shopify Payments.
- Customer Experience Checkout Friction: With a third-party payment processor, it may result in a more complicated checkout process for the customers, potentially leading to cart abandonment or even checkout friction.
So, here we are at the end of this blog and we hope that after reading the pros and cons of the Shopify payment gateway and also of the third-party payment processors also. You guys have got the clear gist about it and also understand which option would be a perfect choice for you guys.
Finally, if you guys are looking to Improve the speed of Shopify stores, and drive more sales for your business, then you can easily reach out to us, and we are happy to do that for you.
Thanks for Reading!