What Is Shopify Payments and How Does It Work?
Shopify Payments is Shopify’s built-in payment processing solution that eliminates the need for a third-party payment gateway. When you use Shopify Payments, you accept credit cards, debit cards, Apple Pay, Google Pay, and Shop Pay directly through Shopify — no Stripe account, no PayPal integration, no separate merchant account required. And critically, Shopify waives its transaction fees (0.5%-2% on non-Shopify payment processors) when you use Shopify Payments.
This guide covers everything you need to know to set up Shopify Payments, configure it correctly, understand its rates, and handle payouts — including what to do if your country isn’t supported.
Step 1: Check Shopify Payments Eligibility
Shopify Payments is available in: United States, Canada, United Kingdom, Australia, Ireland, New Zealand, Singapore, Hong Kong, Japan, Germany, France, Spain, Netherlands, Belgium, Austria, Italy, Sweden, Denmark, and several other countries. Check the current list in your Shopify admin under Settings → Payments.
If Shopify Payments isn’t available in your country, you’ll use a third-party payment provider (Stripe, PayPal, or local alternatives). In that case, Shopify charges a transaction fee of 0.5%-2% per order depending on your plan — factor this into your payment provider selection.
Shopify Payments also has a list of prohibited businesses (adult content, firearms, some pharmaceuticals, gambling) — review the terms before assuming you’re eligible.
Step 2: Activate Shopify Payments
Go to Settings → Payments → Shopify Payments → Activate Shopify Payments. You’ll complete an account setup form requiring:
- Business information — legal business name, business type (LLC, sole proprietor, corporation), business address
- EIN or SSN (US) — tax identification for merchant account compliance
- Bank account details — routing and account number for payouts
- Product description — brief description of what you sell
- Business representative details — name, DOB, address of the primary account representative
The verification process typically takes 24-72 hours. You can start accepting payments during verification, but payouts are held until verification completes.
Step 3: Understand Shopify Payments Rates
Shopify Payments rates vary by plan:
- Basic Shopify ($29/month) — 2.9% + 30¢ online; 2.7% in-person
- Shopify ($79/month) — 2.6% + 30¢ online; 2.5% in-person
- Advanced Shopify ($299/month) — 2.4% + 30¢ online; 2.4% in-person
- Shopify Plus (from $2,000/month) — custom rates, often 2.15% or lower
American Express cards typically process at slightly higher rates. International cards may have additional fees. Compare your expected transaction volume against plan costs — higher plans often pay for themselves through lower processing rates at significant volume.
Step 4: Configure Payout Schedule
Go to Settings → Payments → Shopify Payments → Payout schedule. Choose how frequently Shopify deposits to your bank account:
- Daily — payouts deposited every business day (standard option)
- Weekly — one payout per week on a day you choose
- Monthly — one payout per month on a date you choose
Most merchants prefer daily payouts for cash flow. There’s typically a 2-business-day delay between transaction and payout availability (Shopify Payments processes and verifies each day’s transactions before releasing funds).
Step 5: Enable Apple Pay and Google Pay
With Shopify Payments active, Apple Pay and Google Pay are available to enable. Go to Settings → Payments → Shopify Payments → Manage → Wallets. Enable both Apple Pay and Google Pay.
These one-tap checkout options dramatically reduce mobile checkout friction — customers with stored payment info skip the entire card entry process. Stores that enable Apple Pay and Google Pay typically see 20-35% higher mobile conversion rates. Customers using these wallet payments are pre-verified by their device, reducing fraud risk.
Step 6: Set Up Shop Pay
Shop Pay is Shopify’s accelerated checkout — customers who’ve previously entered payment info on any Shopify store can check out on your store with one click. Go to Settings → Payments → Shop Pay to enable it.
Shop Pay stores encrypted payment information across all Shopify stores — shoppers who’ve used Shop Pay on one store get accelerated checkout on all stores. This network effect makes Shop Pay increasingly powerful as Shopify’s merchant base grows. Shop Pay checkout has been shown to convert 50% better than standard checkout.
Step 7: Configure Manual Payment Methods
Beyond card payments, you may want to accept other payment types. Go to Settings → Payments → Manual payment methods. Add options like:
- Bank transfer / wire — for B2B customers paying by ACH or wire
- Check — for wholesale accounts or customers without cards
- Cash on delivery — for local delivery orders
- Money order — for customers preferring physical payment
Manual payments require manual fulfillment — orders don’t auto-fulfill until you mark payment as received. Use for occasional non-standard payment scenarios, not primary checkout flow.
Step 8: Add Buy Now, Pay Later Options
Buy now, pay later (BNPL) has become essential for purchases over $50 — it dramatically increases conversion for higher-ticket items. Shopify Payments supports several BNPL providers:
- Shop Pay Installments (US) — built into Shop Pay, offers 4 interest-free payments over 6 weeks or longer-term financing up to 24 months for larger purchases
- Affirm — integrates via Shopify’s payment provider list; longer-term financing options
- Klarna — popular in Europe and increasingly US; pay later and installment options
- Afterpay/Clearpay — 4 installment payments, strong in Australia and growing globally
Step 9: Handle Payment Disputes and Chargebacks
Chargebacks happen — customers dispute charges through their bank. Shopify Payments notifies you when a chargeback is filed. Respond within the given deadline (typically 7-21 days) with evidence:
- Order details and customer information
- Shipping confirmation with tracking number showing delivery
- Photos of packaged and shipped items (for high-value orders)
- Customer communications showing product received
- Your store’s refund and return policy (ensures customer was notified)
Submit evidence via Shopify admin. High chargeback rates (above 1%) risk account suspension — monitor fraud risk scores on orders and require additional verification for high-risk transactions.
Frequently Asked Questions
Is Shopify Payments available in my country?
Shopify Payments is available in the US, Canada, UK, Australia, New Zealand, Ireland, Singapore, Hong Kong, Japan, and most of Western Europe. If your country isn’t supported, you’ll use a third-party payment provider like Stripe or PayPal. Check Settings → Payments in your Shopify admin for the most current list of supported countries.
What are the Shopify Payments transaction fees?
Shopify Payments charges credit card processing rates (2.4-2.9% + 30¢ for online orders, depending on your plan) but eliminates Shopify’s additional transaction fees (0.5-2%) that apply when using third-party gateways. On Basic Shopify, using Shopify Payments saves 2% per transaction compared to PayPal.
How long does it take to get paid with Shopify Payments?
With daily payouts, sales from today’s batch are typically deposited 2 business days later. So Friday’s sales often arrive Tuesday. Weekends and bank holidays extend the timeline. Newly activated accounts may have a longer initial verification hold (7-14 days) on the first payout. After that, the standard 2-day cycle applies.
Can I use Shopify Payments and PayPal at the same time?
Yes — many stores offer both. Shopify Payments handles credit/debit card transactions (no transaction fee), while PayPal gives customers who prefer PayPal an option (Shopify charges no transaction fee for PayPal on certain plans if configured as a payment provider vs. manual payment). Both appear at checkout simultaneously for maximum customer payment choice.
What happens if Shopify Payments is not available in my country?
Use a third-party payment gateway: Stripe (most widely available), PayPal (global), 2Checkout, or local alternatives specific to your region. Shopify charges an additional 0.5-2% transaction fee (depending on plan) on all non-Shopify Payments transactions. Compare these costs against Stripe’s or local gateway’s processing fees to find the most cost-effective combination.
Final Thoughts
Shopify Payments is the simplest and most cost-effective payment setup for eligible Shopify merchants. By eliminating transaction fees and consolidating payments, payouts, and reporting in one interface, it reduces operational complexity while typically saving money vs. third-party gateways. The addition of Shop Pay, Apple Pay, and BNPL options through a single settings menu makes building a high-converting checkout straightforward.
For more on optimizing your Shopify store’s financial operations, explore our guides on tax settings, shipping configuration, and analytics for understanding payment channel performance.
