Shopify Payments: An overview of payment methods and their sales potential

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One last step and it's done. The payment process is the last instance at which customers can cancel their purchase. That's why there should be no nasty surprises waiting for your customers here. According to a survey by Statista 59% of online consumers abandon their purchases if they are not satisfied with the payment methods offered. That's why Shopify Payments should cover all common payment methods wherever possible. But what exactly is behind Shopify Payments, what are the advantages and disadvantages and what are the alternatives? This is exactly what I would like to share my experiences with you.

What is Shopify Payments?

Shopify Payments is an integrated payment processing solution offered by Shopify. It allows merchants to accept payments directly through their Shopify stores without having to rely on external third-party payment gateways. All payments can be easily managed from one dashboard.

Which payment providers Shopify Payments includes

Not every payment solution can be offered directly with Shopify Paymets. Below you will find a list of payment methods that you can use in Shopify Germany with Shopify Payments.

Klarna: Purchase on account

This option is now the most popular payment method in Germany. With Shopify Payments, this is possible with Klarna. The payment provider also offers other flexible options for paying the invoice. You can find out more in our article about Klarna with Shopify. All customers who prefer to purchase on account are already satisfied.

Instant bank transfer

Payment via Sofortüberweisung, which has also been part of Klarna since 2014, is also very popular in Germany. Customers use their online banking access data for this.

Apple Pay and Google Pay

These two payment providers are also gaining ground in the DACH region. Although Apple Pay and Google Pay are currently hardly used, the potential user numbers are extremely high due to the simple integration into every smartphone. The provision of these payment gateways is likely to appeal to a younger target group in particular.

Credit card payment

The credit card is a widely used payment solution. Credit card payments are rarely used in Germany, but are all the more popular in Austria. Shopify Payments supports: VISA, MasterCard, Maestro and American Express. 

Bank transfer with EPS

Transfers via EPS are also popular in Austria. These are similar to instant transfers. Buyers make their payment using their own online banking access data, but no sensitive data is forwarded.  

Store Pay

Store Pay is Shopify's in-house payment method. With Shop Pay, a lot of emphasis is placed on simple and accelerated payment. Payment information such as email address and shipping information only needs to be entered once, which leads to a better checkout experience. Store Pay also supports the express checkout function, which allows customers to buy a product directly with just a few clicks.

In which countries is Shopify Payments available?

Shopify Payments is currently available in the following countries:

Australia	Austria	Belgium
Canada	Czech Republic	Denmark
Finland	France	Germany
Hong Kong	Ireland	Italy
Japan	Netherlands	New Zealand
Portugal	Romania	Singapore
Spain	Sweden	Switzerland
United Kingdom	United States

Advantages of Shopify Payments

Of course, Shopify benefits considerably if you use Shopify Payments for your store. For this reason, Shopify tries to make its payment gateway as attractive as possible. That's why Shopify Payments offers you a number of advantages, each of which I'll go into in more detail.

Simple setup 

The payment methods are easy to set up with Shopify Payments and are ready to use in just a few minutes. This saves you having to set up and verify different business accounts and you don't have to create a link. 

Compatibility with other payment providers

Shopify Payments can be operated simultaneously with other payment gateways such as Paypal to give the customer maximum choice.

No additional transaction fees

The best argument for Shopify Payments. Activation saves you the transaction fees charged by Shopify.

Shopify charges two different types of fees. The first consists of transaction fees that you pay to external providers. For example, companies such as VISA or Paypal charge fees for processing payment transactions. These fees are borne by you as the merchant. The fees vary depending on the payment method and Shopify plan. 

In addition, there are other fees that Shopify charges you. These also vary, but can be avoided. Because as soon as you activate Shopify Payments in your store, the additional fees that Shopify charges are completely eliminated, regardless of the payment method that your customers choose. For this reason, I recommend every Shopify merchant to activate Shopify Payments.

Checkout process in your own store

The checkout process with Shopify Payments takes place entirely in your own store. This eliminates potential hurdles such as additional login procedures on third-party sites, which can have a positive effect on the conversion rate. 

Security and fraud protection

Shopify Payments guarantees the highest security standards. All payment data is fully encrypted and PCI-compliant. In addition, Shopify Payments offers fraud analysis that detects criminal activity. For this purpose, AVS checks, card verification numbers and IP addresses are analyzed and a detailed report is created for each order.

Overview in the Shopify Payments Dashboard

In the Shopify Payments dashboard, you have all transactions at a glance. This allows you to manage and view all payments centrally with a complete overview.

The perfect solution for international online stores

Shopify Payments supports over 130 currencies and is therefore, in my opinion, indispensable for international Shopify stores.

Ideal interface to physical stores

Shopify Payments also makes your life easier in conjunction with a physical store. Through Shopify POS allows you to seamlessly connect your physical store with your Shopify Shop. This means you can easily accept payments in-store or at trade fairs.

Express check-out

 With Shopify Payments, you can easily integrate the express checkout options of Apple Pay, Google Pay and Shop Pay to provide your customers with particularly convenient checkouts. This function actively reduces the number of abandoned purchases.

Disadvantages of Shopify Payments

Nothing comes with advantages, so Shopify Payments also has disadvantages. However, I can already say in advance that the elimination of fees and compatibility with other payment gateways are enough reasons to recommend Shopify Payments to almost every Shopify merchant. Nevertheless, here is a brief overview of the disadvantages for you.

Chargeback fees

In Germany, a fee of €15 is charged for each chargeback. This can add up to high costs in some cases. These chargebacks can occur, for example, when credit card payments are canceled. However, these do not normally occur more frequently.

Frozen contributions

Under certain circumstances, suspicious activity may be checked. Shopify Payments can temporarily freeze your funds for this purpose. If you are affected by this, it is advisable to contact Shopify Support directly, who can help you to resolve your problem quickly. 

Click here for Shopify support

Shopify Payments setup, this is how it works

What do I need to consider before setting up Shopify Payments? 

• First, you should make sure that your bank account meets Shopify's requirements. 
• The account must be a current account that accepts the local currency of your region.
• Shopify does not support savings accounts or foreign currency accounts.
• A German account must therefore be held in euros, support SEPA transfers and have a valid IBAN.

Activate Shopify Payments

• In the "Admin area" of Shopify, go to "Settings" and then Payments. 
• If you have not yet set up a credit card provider, click on "Complete account setup" in the Shopify Payments section. Alternatively, click on "Activate Shopify Payments".
• You must then fill in all the required business details correctly.
• Now you need to enter your personal details from your ID card and enter your IBAN.
• Check once again that you have filled in all the details correctly. You can then complete the setup.

Shopify Payments should then be set up successfully and your customers can now shop using the most common payment methods.

Which payment methods should you offer in addition to Shopify Payments in your Shopify Shop?

Since Shopify Payments saves you transaction fees regardless of the payment method and 59% of customers are likely to bounce if they cannot find an acceptable payment method in your store, it is particularly important to choose the right payment gateway. In addition to Shopify Payments, I would recommend the following providers:

PayPal

PayPal is one of the most popular payment methods in Germany. That's why it should not be missing in any Shopify store. To enable your customers to use PayPal, you must first connect the payment method to your store. Then they can pay as usual in your store with the service provider.

Prepayment/bank transfer

Although this relic from the past is hardly used nowadays, it can still be a useful addition depending on the target group. Setting up bank transfers in your Shopify store is relatively simple. You can find the option in your Shopify settings under Payments. A small drawback is that with this payment method you have to manually mark the order as paid. 

Payment on collection

If you also want to enable your customers to pick up the products on site, this payment function is ideal. You can also easily set up payment on collection in your Shopify settings. Once the customer has paid for the product on site, you also need to manually mark the order as paid.

SEPA Direct Debit

Direct debit is particularly suitable for subscriptions. With this method, the customer authorizes you to debit the amount directly from their account. Unfortunately, this payment method is not directly supported by Shopify. However, you can use external payment service providers that offer SEPA. I recommend the provider Mollie for this. The only disadvantage here is that users are redirected to an external payment page for the checkout.

Amazon Pay

Amazon may well be seen as a competitor, but the advantage of accepting this payment method is obvious. Many people already have an Amazon account. Many people find registering in another online store a hurdle, but Amazon Pay takes this off their hands. This allows customers to make a purchase in your online store quickly and without any hurdles.

Meta Pay 

As with Amazon Pay, it is more convenient for many customers to use their existing Meta (Facebook & Instagram) account for payment.

Bitcoin and other cryptocurrencies

Cryptocurrencies are a polarizing topic. While many are rather sceptical about the entire industry, others have already recognized its use case and are using it. Various third-party apps want to enable payment with cryptocurrencies in Shopify stores, but the entire industry is still in the starting blocks. Personally, I would still advise against implementing it at the moment, but it could be an interesting alternative to traditional payment methods in the future.

Which payment methods are mandatory in DACH stores for more sales

To prevent your checkout from becoming a conversion killer, you should definitely offer the most popular payment methods in the DACH region in your Shopify store. A study shows that 82% of shoppers abandon their shopping cart if their preferred payment method is missing (Stripe - state of european checkout).

According to the EHI Retail Institute, PayPal (28% market share), purchase on account (27%), SEPA direct debit (17%) and credit cards (11%) are the most important payment methods in e-commerce in Germany. Together, they account for over 80% of the payment volume (Stripe - Payment Methods Germany).

In addition, digital wallets such as Apple Pay and Google Pay are becoming increasingly important as they significantly speed up the checkout process and thus reduce abandoned purchases. They are considered conversion drivers, especially for mobile purchases.

BNPL options (Buy Now, Pay Later) such as Klarna are also in high demand in the DACH market. They offer customers flexible payment models such as installment purchases or on account and, according to industry analyses, can increase the conversion rate by up to 30 % (Convertcart - Cart Abandonment Statistics).

For retailers in the DACH region, the following therefore applies: PayPal, purchase on account, SEPA direct debit, credit cards and digital wallets are indispensable for minimizing abandoned purchases and sustainably increasing sales.

Conclusion on Shopify Payments

Shopify makes our lives easier with Shopify Payments. With a collection of popular payment methods, we can save ourselves the complicated setup of many service providers. The decisive factor for an unreserved recommendation on my part, however, is above all the possibility of saving the extra Shopify fees that Shopify would otherwise charge for third-party solutions. Since Shopify Payments does not exclude the use of alternative gateways, these can also be set up as required. As a result, Shopify Payments shines with its advantages, while the disadvantages are negligible. As a Shopify agency we can advise and support you in the Shopify Space on all topics. Feel free to contact us for a free introductory meeting. 

Shopify Payments FAQ

What payment methods are available at Shopify?
There are many payment methods available at Shopify. Via Shopify Payments, you can offer Klarna (invoice, instant bank transfer), credit and debit cards, Apple Pay, Google Pay, Shop Pay, giropay and EPS in Germany. You can also integrate external providers such as PayPal, Amazon Pay or Mollie. This allows you to cover practically all important payment methods.

Can I pay at Shopify without a credit card?
Yes, you can pay at Shopify without a credit card. Customers can also use other payment methods in the checkout. A credit card is therefore not absolutely necessary.

Is Shopify Payments available in Germany?
Yes, Shopify Payments is available in Germany. Merchants can make full use of it here and thus offer common payment methods directly in the Shopify checkout.

How does Shopify Payments work?
Shopify Payments works as an integrated payment processing directly in the Shopify store. Customers select their preferred payment method in the checkout and the payment is processed via Shopify Payments. As a merchant, you see all transactions centrally in the dashboard and receive your payouts automatically to your bank account. Advantage: No redirection to third-party sites and no additional Shopify transaction fees.

What is Shopify Payments and how does it work?

Shopify Payments is Shopify's official payment gateway that allows merchants to process payments directly through their Shopify website. It supports a variety of payment methods and ensures seamless integration into your checkout process.

Are there any disadvantages of Shopify Payments?

The disadvantages of Shopify Payments include possible restrictions on use in certain countries and the lack of certain payment options offered by third-party providers. In addition, Shopify chargeback errors or suspicious account activity can lead to delays.

How do I set up Shopify Payments for my store?

Setting up Shopify Payments is simple and takes just a few steps. Go to the payment information in your Shopify admin area and follow the instructions to activate and configure the payment gateway.

Can I also use Paypal or Stripe with Shopify Payments?

Yes, you can also install third-party providers like Stripe or PayPal to offer a variety of payment options for your customers. Shopify Payments works in parallel with other providers.

How can I test Shopify Payments for free?

You can test Shopify for free by signing up for a trial version. During this test phase, you have the opportunity to integrate Shopify Payments and try out the functions without risk.