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Shopify payments vs Stripe
When it comes to searching for the best payment processor for your business, the challenging endeavour is to choose between the two best payment processors-Shopify Payment and Stripe. Each comes with its own set of features and benefits, although both are robust systems for managing payments and transactions.
To help you decide which payment service is ideal for your company. In this comprehensive Shopify vs Stripe comparison article, we’ll explain and cover everything you need to know regarding Shopify payments and Stripe starting from its customer care support to pricing structure to features and benefits, so that it enables you to make an informed decision before subscribing to any of the platforms.
What is Shopify Payments?
Shopify Payments is the default payment gateway of Shopify and it is Shopify’s own payment provider. The automatic integration of Shopify payment in Shopify allows customers to enjoy a seamless transaction without manually entering the credentials of third-party payment providers.
After registration, you can start accepting payments almost immediately with Shopify payments. The biggest advantage of Shopify payments is that it provides both local and major payment gateways for payment processing giving the consumers the flexibility to choose the preferred payment option.
Key Features and Benefits
- Seamless Integration: As part of the Shopify ecosystem, Shopify Payments is fully integrated with all store functions.
- No Additional Transaction Fees: Shopify waives extra fees typically charged when using third-party gateways.
- Quick Setup: Merchants can enable Shopify Payments with just a few clicks.
Target Audience
Shopify Payments is ideal for businesses that operate exclusively on the Shopify platform and prioritize simplicity and cost efficiency.
Pros of Shopify Payments
- Streamlined Setup: No technical expertise required; it’s ready to go right out of the box.
- Lower Costs: Avoids additional transaction fees for Shopify stores.
- Centralized Dashboard: Manage orders, payments, and payouts from one place.
Cons of Shopify Payments
- Limited Scope: Only available to Shopify users.
- Geographic Restrictions: Not available in all countries.
- Basic Features: Lacks advanced tools for developers or highly customized workflows.
What is Stripe?
Stripe is a standalone payment processor renowned for its versatility and developer-friendly features. It powers payments for businesses of all sizes, from startups to enterprises.
Key Features and Benefits
- Customizable API: Stripe’s robust API allows for tailored payment solutions.
- Global Reach: Supports over 135 currencies and a variety of payment methods.
- Developer-Focused: Perfect for tech-savvy teams looking to build custom integrations.
Target Audience
Stripe is best suited for businesses that require advanced features, operate globally, or need significant customization.
Pros of Stripe
- Flexibility: Highly adaptable to various business needs.
- Diverse Payment Options: Accepts everything from credit cards to digital wallets.
- International Accessibility: Available in more countries than Shopify Payments.
Cons of Stripe
- Complex Setup: Requires some technical knowledge to maximize its capabilities.
- Extra Costs: Fees for additional services like advanced fraud protection.
- Third-Party Dependence: May need plugins or apps for certain integrations.
Key Differences Between Shopify Payments and Stripe
Integration and Usability
- Shopify Payments: Fully integrated within Shopify, making it simple for existing users.
- Stripe: Requires integration, but its API offers unmatched customization for developers.
Fees and Costs
- Shopify Payments eliminates additional transaction fees but charges standard processing fees.
- Stripe’s fees include processing and optional extras, which may add up for certain businesses.
Global Availability
- Shopify Payments: Limited to select countries.
- Stripe: Operates in over 40 countries, supporting a broader audience.
Supported Payment Methods
- Shopify Payments: Covers major credit cards and some alternative methods.
- Stripe: Offers extensive options, including cryptocurrencies and bank transfers.
Shopify Payments vs. Stripe: Which Is Easier to Use?
For beginners, Shopify Payments is the clear winner. Its integration with Shopify makes the setup process effortless. In contrast, Stripe appeals to tech-savvy users who can leverage its API for customized solutions.
Subscription model: Shopify payments vs Stripe
It is crucial to compare the differences between Shopify and Stripe’s fees, transaction costs, and long-term business cost implications.
Subscription structure: Shopify Payments
Monthly Fees: If you utilize Shopify payments and Stripe together then there are no additional transaction fees required. Nevertheless, you must buy Shopify using a subscription which has a variety of plans. The base package starts from $39 per month.
Transaction Fees: i) Online Payments: Depending on the plan chosen, online payments usually range between 2.4% to 2.9% + 30c each transaction.
ii) In-Person payments: The range of fees is 2.4% to 2.7%.
International fees: For transactions involving currency conversion, Shopify payments can levy a mid-market currency conversion fee of around 1.5% to 3%.
Subscription structure: Stripe
Monthly Fees: Stripe is only able to charge you for each transaction that is completed and there are no monthly fees.
Transaction charges: The standard rate for online payments is 2.9% + 30¢ for each successful card charge.
In-person charges: It begins at 2.9% + 30¢, although it differs based on the area and mode of payment.
International Fees: Stripes levies currency conversion fee of around 1% and an extra 1%+30¢ for cross-border transactions.
Extra services: Depending on the service utilized, Stripe may charge around 0.4% to 0.8% for invoicing and recurring billing.
Shopify payments vs Stripe: Pricing Structure Comparison
| Feature | Shopify Payments | Stripe |
|---|---|---|
| Monthly Fees | Varies by plan (from $29 to $399) | None |
| Online Payment Fees | 2.9%+30¢ (Basic), 2.6%+30¢ (Shopify), 2.4%+30¢ (Advanced) | 2.9%+30¢ |
| In-Person Transaction Fees | 2.4%-2.7% | 2.9%+30¢ |
| Additional Fees | 0.2%-5% for third-party gateways | Charges for chargebacks, currency conversion, etc. |
| International Fees | Mid-market currency conversion fee | 1%+30¢ for cross-border transactions |
Monthly Fees
Shopify Payments: The cost of Shopify Payments depends on the selected Shopify plan, which ranges from $29 for the Basic plan to $399 for the Advanced plan. These plans come with varying features and levels of support. Notably, there are no extra monthly charges solely for using Shopify Payments.
Stripe Payments: Stripe doesn’t require any monthly subscription fees, making it a cost-effective choice for startups and small businesses that prefer avoiding fixed expenses and paying only for processed transactions.
Online Payment Fees
Shopify Payments: The transaction fees differ based on the chosen Shopify plan:
- Basic Plan: 2.9% + 30¢ per transaction.
- Shopify Plan: 2.6% + 30¢ per transaction.
- Advanced Plan: 2.4% + 30¢ per transaction.
These rates apply to online purchases made through the Shopify platform.
Stripe Payments: Stripe maintains a flat rate of 2.9% + 30¢ per online transaction. This transparent pricing model simplifies cost estimation for businesses, regardless of transaction type.
In-Person Payment Fees
Shopify Payments: For transactions conducted in person via Shopify POS, fees range between 2.4% and 2.7%, depending on the selected plan. This setup is particularly useful for physical stores using Shopify’s payment solutions.
Stripe Payments: Stripe charges 2.7% + 5¢ per in-person transaction processed through its point-of-sale system. This competitive rate is appealing to businesses operating both online and offline.
Additional Fees
Shopify Payments: Merchants opting for third-party payment gateways instead of Shopify Payments face additional charges ranging from 0.5% to 2%, depending on their plan. This fee structure incentivizes users to rely on Shopify’s built-in payment solution.
Stripe Payments: While Stripe is transparent with its pricing, additional charges may apply for certain services, such as $15 for chargebacks and currency conversion fees for international transactions. These costs can accumulate based on the scale of the business.
International Fees
Shopify Payments: For international transactions, Shopify Payments applies a mid-market currency conversion fee, which fluctuates depending on the payment method and prevailing exchange rates.
Stripe Payments: Stripe charges an additional 1% + 30¢ for cross-border transactions. Businesses operating internationally need to consider these fees when setting their pricing strategies.
Shopify Payments vs Stripe: Features comparison
| Features | Shopify Payments | Stripe |
|---|---|---|
| Integration | Seamless with Shopify eCommerce platform | Versatile, can integrate with various platforms |
| Customization | Limited Customization options | Advanced Customization available |
| Payment methods accepted | Major credit cards, Apple Pay, Google Pay | Extensive options including BNPL services and various regional methods |
| Invoicing/Billing | Free invoicing; recurring billing requires an app | Charges apply for invoicing; flexible billing option available |
| Best use case | Ideal for small-to-medium sized retailers | Best for businesses needing complex payment solutions |
If you want to choose the best processor to elevate your e-commerce game, then consider going through this detailed comparison on the two best payment processors, Shopify Payments vs Stripe. We’ve drawn a detailed comparison between these two payment solutions so that enterprises can purchase the best payment processing solutions based on their unique requirements and budget.
Feature Descriptions
Integration
Shopify Payments: Shopify Payments is fully integrated into the Shopify platform, offering a smooth and hassle-free setup. Merchants can begin accepting payments immediately without configuring third-party tools or additional settings.
Stripe: Stripe stands out for its adaptability, supporting integration with various eCommerce platforms, websites, and mobile apps. It provides developers with extensive APIs, enabling the creation of customized payment solutions tailored to unique business requirements.
Customization
Shopify Payments: Designed for simplicity, Shopify Payments offers a basic setup with limited customization options. Merchants can adjust essential settings, but achieving a highly tailored payment experience might be challenging.
Stripe: Stripe provides advanced customization options, empowering businesses to design unique payment workflows. Developers can personalize the checkout process and integrate diverse features to suit specific needs.
Payment Methods Accepted
Shopify Payments: Accepts major credit cards and popular digital wallets, such as Apple Pay and Google Pay. While these options meet the needs of most online shoppers, they may not include all region-specific payment methods.
Stripe: Supports an extensive range of payment methods, including credit cards, digital wallets, bank transfers, and buy now, pay later (BNPL) services. This broad compatibility makes Stripe an excellent choice for businesses operating in varied markets.
Best Use Case
Shopify Payments: Best suited for small to medium-sized businesses that prefer a straightforward, integrated payment solution requiring minimal technical expertise.
Stripe: An ideal option for businesses with complex payment requirements or those needing to embed payments into custom applications. Its flexibility makes it a great fit for tech-savvy companies or businesses with unique needs.
Supported Payment Methods
| Supported Payment Methods | Shopify Payments | Stripe |
|---|---|---|
| Credit cards | Yes | Yes |
| Shopify Pay | Yes | No |
| Digital Wallets | Yes (Apple Pay, Google Pay) | Yes (Apple Pay, Google Pay) |
| ACH Transfers and SEPA Payments | No | Yes |
| Cryptocurrencies | No | Yes (Bitcoin) |
| Buy now, Pay later options | No | Yes (Klarna, AfterPay) |
Security and Fraud Prevention
Both platforms prioritize security, offering tools to protect businesses and customers:
- Shopify Payments: Built-in fraud analysis tools and PCI compliance.
- Stripe: Advanced fraud detection through its Radar feature and extensive customization for security protocols.
Scalability and Growth Potential
- Shopify Payments: Ideal for small to medium businesses looking for simplicity.
- Stripe: Supports businesses at all stages, with features designed for large-scale operations.
Industry Suitability
- Shopify Payments: Best for e-commerce stores exclusively using Shopify.
- Stripe: Works well for a variety of industries, including SaaS, marketplaces, and global businesses.
Case Studies and Real-Life Examples
Shopify Payments User Example
A small online clothing boutique using Shopify Payments benefits from reduced costs and seamless integration with its store.
Stripe User Example
A subscription-based SaaS company utilizes Stripe’s API to create a custom billing system that supports recurring payments globally.
Pros and Cons Recap
Shopify Payments Pros and Cons
- Pros: Easy setup, no extra transaction fees, integrated dashboard.
- Cons: Limited availability, basic features.
Stripe Pros and Cons
- Pros: Advanced customization, global accessibility, diverse payment options.
- Cons: Technical setup, potential additional costs.
Which Should You Choose?
Key Factors to Consider
- Business Type: Shopify Payments for Shopify-exclusive stores; Stripe for diverse platforms.
- Growth Plans: Stripe offers more flexibility for scaling businesses.
- Technical Expertise: Stripe requires technical knowledge; Shopify Payments is beginner-friendly.
When to Choose Shopify Payments
If you’re using Shopify and want a hassle-free solution.
When to Choose Stripe
If you need advanced features or operate across multiple platforms.
Conclusion
Shopify Payments and Stripe both act like excellent solutions for businesses when it comes to seamless payment solutions. For small to mid-scale enterprises who are considering to use a simple yet effective payment solution within the shopify platform, Shopify payments is the ideal option. It is a great option for streamlining payment procedures because of its affordability combined with ease of use.
In contrast, Stripe is another top-notch player with unique potentials like scalability, affordability and support for numerous payment options like ACH transfers, credit cards and cryptocurrencies proving to be of considerable value to hotshot enterprises expanding internationally and fulfilling heavy consumer demands. Choosing between these two platforms boils down to operational priorities and E-commerce strategy. Both will enhance your business procedures in their unique ways regardless of your preference for complexity or simplicity.
FAQs
1. What’s the main difference between Shopify Payments and Stripe?
Shopify Payments is exclusive to Shopify stores, while Stripe is a standalone payment processor that works across various platforms.
2. Is Shopify powered by Stripe?
Stripe powers Shopify payments, the company’s integrated payment gateway.
3. Are there any hidden costs associated with Shopify Payments?
While there are no additional transaction fees, processing fees still apply based on your Shopify plan.
4. Is Stripe suitable for small businesses?
Yes, Stripe’s flexibility makes it suitable for businesses of all sizes, but it may require technical expertise.
5. Does Shopify payments use Stripe?
Over a million businesses worldwide are powered by the E-commerce platform Shopify. It was looking for a way to expand its products, and was already utilizing Stripe to power its Shopify solutions. It resorted to Stripe to empower its new Shopify solution and enable merchants to launch, expand and manage their businesses.
6. Which is better: Shopify payments or Stripe?
Shopify payments cannot be considered as flexible as Stripe, still it’s typically easier to use and it connects with Shopify in an effortless manner. Contrarily, Stripe is an excellent choice for large enterprises as it provides greater customization and is more appropriate for companies with specialized and intricate payment requirements. However, this tool can be quite difficult to set up initially.
7. What are the disadvantages of using Shopify payments?
The biggest disadvantages of using Shopify payments are:
i) There is a lack of Shopify payments.
ii) There is hardly any way to alter the order of payments.
iii) The platform’s loading speed reduces with the addition of too many add-ons.
iv) Fee variability has the biggest impact on the overall profitability of the company.
v) B2B functions are quite poor.
8. Which payment gateway is best for Shopify?
The top payment gateways considered to be excellent for Shopify are Shopify payments, Paypal, Adyen, Authorize.net, WorldPay, and Stripe.
9. Is Stripe considered free for Shopify?
Shopify payments operates in 23 countries and is integrated into Shopify stores. Numerous currencies are accepted and payments can be made with digital wallets, debit cards, and major credit cards. On the other hand, with Shopify you need to take a subscription whereas Stripe charges per transaction.
10. Why can’t I make payments with Shopify?
Shopify payments can only be used by retailers operating in specific countries and areas. It is vital to secure your personal account on Shopify using two-factor authentication.
