Is Shopify Payments the Same as Stripe?

Table of Contents

1. Introduction
2. What Are Shopify Payments and Stripe?
3. Key Differences Between Shopify Payments and Stripe
4. Suitability Based on Business Model
5. Conclusion
6. FAQs

Introduction

Imagine this: You’ve finally launched your dream online store. After months of tireless work and dedication, your website is live, and products are ready for customers from around the world. But wait, there's one crucial aspect that can make or break your business – the payment system. Should you go with Shopify Payments or Stripe? The choice isn't as simple as it seems, especially when your money and customers' trust are on the line.

In this article, we dive deep into Shopify Payments and Stripe, exploring their features, pros, cons, and suitability for different business scenarios. By the end, you'll understand in detail whether Shopify Payments is the same as Stripe and which one might be the better fit for your business.

Let’s get started!

What Are Shopify Payments and Stripe?

Shopify Payments

Shopify Payments is Shopify’s proprietary payment gateway designed for businesses using the Shopify platform. It allows online businesses to accept and process various types of payments directly through their Shopify stores. Interestingly, Shopify Payments is powered by Stripe, a popular third-party payment processor.

Stripe

Stripe is a third-party payment service provider that enables businesses to accept and process payments online. It supports a vast array of payment methods and is known for its robust APIs, making it highly customizable and developer-friendly.

Key Differences Between Shopify Payments and Stripe

Although Shopify Payments uses Stripe’s technology, there are several key differences between the two:

Availability

• Shopify Payments: Available only to businesses that use the Shopify platform. Additionally, it's only available in 22 countries.
• Stripe: Available in over 30 countries, and can be integrated into various e-commerce platforms, not just Shopify.

Integration

• Shopify Payments: Seamlessly integrates with Shopify’s ecosystem, enabling you to manage everything from a single dashboard.
• Stripe: Requires more technical setup but can be integrated with a variety of e-commerce platforms and custom websites, giving you more flexibility.

Transaction Fees

• Shopify Payments: Charges flat-rate fees based on your Shopify subscription plan. For example, Shopify Basic charges 2.9% + $0.30 per transaction online.
• Stripe: Charges 2.9% + $0.30 per online transaction across the board, but additional features like currency conversions incur extra fees.

Payout Timings

• Shopify Payments: Typically processes payouts every 2-3 business days depending on your location.
• Stripe: Payouts take 7-14 days initially for verification, and then similar 2-3 day intervals afterward.

Features and Customization

• Shopify Payments: Less customizable but highly integrated into Shopify’s robust e-commerce feature set.
• Stripe: Highly customizable, offering multiple ways to accept payments, including detailed APIs for custom solutions.

Suitability Based on Business Model

Shopify Payments

Pros:

• Integrated Solution: Since it's built into Shopify, setup is straightforward and quick.
• Transparent Fees: All transaction fees are bundled within the Shopify ecosystem.
• Various Payment Methods: Besides credit/debit cards, it supports Apple Pay, Google Pay, and other digital wallets.
• Fraud Prevention: Built-in fraud prevention features specific to Shopify stores.

Cons:

• Availability: Limited to merchants in 22 countries.
• Additional Fees for Third-Party Gateways: Using another payment gateway incurs extra fees.

Stripe

Pros:

• Customizability: Highly adaptable for various e-commerce platforms and use cases.
• Developer-Friendly: Extensive API support for custom solutions.
• Wide Reach: Available in more countries than Shopify Payments.
• Variety of Payment Methods: Supports ACH transfers, wire transfers, and local payment methods.

Cons:

• Technical Setup: Requires a higher level of technical knowledge to integrate and manage.
• Long Initial Payout: The first payout can take up to 14 days, impacting cash flow for new businesses.

Practical Scenarios

Example 1: A Shopify-Based Business Targeting a Domestic Market

If you're running an online store on Shopify and primarily target customers within one of the supported countries for Shopify Payments, using Shopify Payments will be the most convenient and seamless option. You'll benefit from integrated features and transparent pricing without dealing with extra charges for third-party services.

Example 2: An International Business on a Custom Platform

For a business with a custom-built site or one using a platform other than Shopify, Stripe's flexibility and global reach make it a better option. You can integrate diverse payment options that cater to international customers, and the extensive API support allows for significant customization.

Conclusion

So, is Shopify Payments the same as Stripe? Technically, no. While Shopify Payments is built on Stripe’s infrastructure, it is tailored specifically for Shopify’s ecosystem, providing a more integrated and seamless experience for Shopify users. On the other hand, Stripe offers broader flexibility and customizability, making it suitable for a variety of platforms and complex e-commerce needs.

Ultimately, the choice between Shopify Payments and Stripe depends on your specific business requirements, the countries you operate in, and the level of customization you need. If you are invested in the Shopify ecosystem and are selling primarily in supported countries, Shopify Payments offers convenience and ease of use. For those who need more flexibility and operate on multiple platforms or internationally, Stripe is a powerful alternative.

FAQs

1. Can I use both Shopify Payments and Stripe for my Shopify store?

No. Shopify only allows one active credit card payment gateway at a time. While you can offer alternative payment methods like PayPal, you'll need to choose between Shopify Payments and a different primary gateway like Stripe.

2. Do Shopify Payments and Stripe support crypto payments?

Currently, neither Shopify Payments nor Stripe offers direct support for cryptocurrency payments. However, you can integrate third-party solutions to accept crypto payments on your Shopify store or other platforms.

3. Will I incur additional fees if I use another payment gateway with Shopify?

Yes. If you use a third-party payment gateway instead of Shopify Payments, Shopify will levy an additional transaction fee ranging from 0.5% to 2% depending on your subscription plan.

4. How can I avoid chargebacks on Shopify Payments and Stripe?

Both Shopify Payments and Stripe offer built-in fraud prevention tools. Ensuring clear communication with customers, providing transparent return policies, and using these fraud tools can help minimize chargebacks.

5. Is it difficult to switch from Shopify Payments to Stripe?

The switch isn't overly complex but will require some technical adjustments. You’ll need to deactivate Shopify Payments, set up Stripe, and ensure all configurations align with your business needs. Documentation and customer support from both platforms can assist during the transition.

With this comprehensive understanding, you are now better equipped to make an informed decision. Happy selling!