As you probably know, nowadays, because of its superb internet marketing strategies, Shopify has quickly become the number one choice for anyone looking to launch an online business. During the launching process of a store on this platform, one of the most important parts shop owners should focus on is the payment process. In terms of payment methods on Shopify, people immediately think of the two most popular forms of payment: Shopify payments vs stripe. So, which payment method should you use? Let’s take a look at this blog of ArrowHiTech right away!
What are Shopify payments vs stripe
In fact, both Shopify payments vs stripe are extremely well-known with tens of thousands of users all over the world. However, they are very different on the surface.
To begin, you need to know the definition of Shopify payments vs stripe.
What is Shopify payments?
As its name suggests, Shopify payments is a product specific to the Shopify platform. Simply speaking, this means that if you don’t utilize Shopify, your store won’t be able to use Shopify payments. What’s more, you should bear in mind that, despite the fact that Shopify Payment is Shopify’s own payment processor, Stripe actually powers this service.
How about Stripe?
Basically, Stripe is a third-party payment provider that automates billing for a variety of eCommerce platforms.
The key differences between Shopify payments vs stripe
For a quick and complete understanding of the main differences between Shopify payments and Stripe, you should consider some factors below.
1. Time of payment
# Shopify payments
As soon as you use Shopify payments, of course, Shopify will pay for you. For more details, payouts from Shopify are made once or twice a week, and they will be sent to the bank account you provided. However, the frequency of your payments will be determined by the country in which you live. For instance, Shopify will pay you every two days if you live in the United States or Australia. And, it will be every three days if you live in the rest of the world. Not only that, you can recieve money payment faster if your bank clears the payment quickly.
Basically, the payment process of Stripe is quite similar to Shopify payment. However, it is a bit more complex than Shopify payment.
For more details, Stripe typically takes from 7 to 14 days to process your initial payment. Besides, Stripe has access to your business, and if you’re in a high-risk industry, they can refuse your payment. Then, this will enable Stripe to carefully check what you’re selling, and if you’re selling things with a high risk of chargebacks or fraud, they’ll put you in a sandbox.
Above all, they do this primarily with the goal of safeguarding the integrity of their payment processor. The final one is the same with Shopify payments: Stripe payouts will be made every two days if you are in the United States or Australia, and every three days for the rest of the world.
2. Chargebacks of Shopify payments vs stripe
As you may know, Chargeback is always one of the most essential and major issues. It’s worth noting that Shopify Payments vs Stripe will keep track of all refunds and chargebacks that occur in your store.
In particular, you will be charged a $15 chargeback fee by both these two forms of payment. If you’re dropshipping, this is especially critical. This is because you can’t always provide things in a timely manner, and your chargeback rate is likely to be high.
# Shopify payments
In reality, Shopify payments have a drawback with users. Following that, if you are having a high rate of chargebacks, your Shopify account will be easily flagged. As a result, Shopify will block your store instantly. So, this is one of the main reasons why many dropshippers avoid Shopify Payments.
Stripe, on the other hand, can suspend your account, but your Shopify store would remain unaffected. This implies that adopting Stripe can help safeguard your Shopify store and spare you a lot of worries when running your store. Best of all, Stripe allows you to get your account back easily in case you lose it. Then, all you need to do now is find a new payment provider and you’re back in business.
It can be seen that with its convenience, Stripe is more popular with users than Shopify payment. The proof is that until now, Shopify Payments is now only available in 17 countries, whereas Stripe supports a significantly larger number of countries, up to 37.
Fraud filters of Shopify payments vs stripe
Both Shopify payments and stripe all take a lot of benefits from Fraud filters. In fact, Fraud filters will prevent fraudulent orders from being processed in your store. They will examine to see if an order is potentially fake so you can feel safe.
# Shopify payments
When using Shopify payments, you are able to utilize its two fraud filters:
- Firstly is Address Verification System (AVS): plays a role to compare the numeric portion of a customer’s billing address to the information on file with the credit card company.
- The other one is Card Verification Value (CVV): Asking for the CVV is a way to make sure the customer has the card physically in their possession.
Stripe comes with three fraud filters for you to apply for your online store. Below are they:
- Stripe Radar is a machine learning fraud detection and prevention technology.
- 3D Dynamic Security: Protect conversion by applying authentication to high-risk transactions automatically.
- Dispute Resolution: Stripe’s own end-to-end automated method works directly with card networks.
Transaction fees and pricing
# Shopify payments
In reality, there are two major pricing components to consider with Shopify. Of course, if you are using the premium Shopify platform, you must pay their monthly cost in order to use Shopify Payment. The cost of a Shopify subscription is determined on the Shopify plan you select.
You are required to pay credit card processing costs in addition to the monthly subscription charge. Best of all, the installation as well as cancellation, PCI compliance, etc of Shopify payments is very easy without any additional fee. Furthermore, if you utilize Shopify Payments as your payment option, the transaction fee will vary depending on your plan. What’s more, international cards must be paid a 1% additional fee.
First and foremost, it’s worth noting, though, that Stripe will levy a $15 chargeback fee. Besides, the transaction fee is the only fee you’ll have to pay with Stripe. Also, Stripe charges you transaction fees at different rates depending on the payment method used by the customer. Similar to Shopify payments, Stripe also charges 1% extra fee if you are an international client.
In fact, Stripe is often inexpensive, with pricing that is both open and simple to comprehend. However, keep in mind that if you use a third-party source such as Stripe, Shopify will charge you an extra fee to cover the costs of that service.
As you can see, if you are running a Shopify online store, Shopify payments will be the ideal choice for you compared to Stripe as well as any third-party payment processing solution. Above all, ArrowHiTech hopes through this blog you will get a lot of useful information about forms of payment methods for building a successful Shopify business. As a reputable company in providing Shopify services through the Spify site, ArrowHiTech believes that we can resolve all your issues while working with Shopify. So, if you are having any trouble, let us know!