In the ever-evolving world of eCommerce, Stripe and Shopify Payments stand out as key players. It's either one or the other. Merchants and online businesses highly regard both and offer unique features tailored to different business needs.
Stripe is known for its customizable, full-service payment platform, ideal for businesses that want a tailored payment solution. Conversely, Shopify Payments is a built-in option designed explicitly for Shopify store owners.
But how do these two compare? Which one is the right fit for your eCommerce business? In this comprehensive comparison of Stripe and Shopify Payments, we’ll break down their features, pricing, as well as how disputes are handled so you can decide which is best for your business.
Shopify Key Features & Payment System
Key Features
Shopify supports a wide range of payment options, including credit and debit cards, digital wallets, and manual payments through card readers and terminals. Shopify Payments also allows you to accept payments in 23 countries and over 130 currencies, providing seamless integration with over 100 payment providers.
Additionally, they offer robust features like customizable checkout experiences, extensive data analytics, and advanced security measures such as fraud filters. It also simplifies financial management by transferring funds directly to your bank account within a few business days, depending on the payment processor and the type of bank account involved.
Furthermore, its abandoned cart recovery tools and discount code options help boost conversion rates. Exclusively available to Shopify users, Shopify Payments provides everything a business needs to process both online and offline payments efficiently.
Shopify Payments
Here’s how the Shopify Payments system works, broken down into key points:
- Seamless Integration: Shopify Payments is built directly into the Shopify platform, allowing businesses to start selling immediately upon account creation.
- Wide Payment Options: Supports various payment methods, including credit/debit cards, digital wallets, manual payments via card readers, and terminals.
- Global Reach: Accepts payments in 23 countries and over 130 currencies, ensuring businesses can operate internationally.
- Flexible Provider Integration: Integrates smoothly with over 100 payment providers, offering versatility across different Shopify store types. The payment provider influences the timeline for transferring funds from the customer's bank to the merchant's account, determining whether the funds are available immediately or take a few business days.
- Customizable Checkout: Allows businesses to customize their digital cart, checkout page, and integrate purchase buttons into existing Shopify websites.
- Advanced Security: Includes Address Verification Services (AVS) and Card Verification Value (CVV) fraud filters for a secure checkout process.
- Financial Management: Automatically transfers sales funds to your bank account on a preferred schedule, typically daily.
- Conversion Tools: Offers features like abandoned cart recovery emails and discount codes to boost conversion rates.
- Exclusive to Shopify: This system streamlines online and offline payments for businesses of all sizes and is available only to Shopify users.
Disadvantages of Using Shopify Payments.
We don't wear rose-colored glasses, so it's important to tackle some downsides of using Shopify Payments. If you're not using Shopify Payments, be aware that using third-party payment gateways comes with extra fees on top of your platform subscription. Here’s the breakdown:
- Basic Plan: 2% fee
- Shopify Plan: 1% fee
- Advanced Plan: 0.6% fee
Keep in mind, Shopify Payments isn’t available in all countries and is exclusive to Shopify merchants. Plus, advanced features like custom reports and analytics come with a premium. Also, Shopify’s strict chargeback and fraud policies mean some businesses may not be eligible to use the service.
Stripe's Features & Payment Style
Notable Features
Stripe offers a comprehensive payment solution to simplify online business transactions at any stage. Whether you're just starting or looking to grow, Stripe provides the essential tools to manage subscriptions, boost revenue, prevent fraud, and expand globally. It seamlessly integrates with over 450 platforms and extensions, making fitting into your existing setup easy.
The key features of Stripe include straightforward integration through APIs and SDKs, enabling you to accept payments both online and offline across various devices. Stripe supports over 100 payment methods, including credit cards, bank transfers, and real-time payments, and allows you to customize payment experiences in 118 countries, handling more than 135 local and international currencies.
Additionally, Stripe offers tools like Sigma, Atlas, and Stripe Billing, which automate financial tasks such as reporting, revenue recognition, and tax management. Its customizable components ensure smooth checkouts on any device while built-in data protection and fraud prevention keep your business secure and compliant.
Stripe caters to both online and offline businesses across various industries. Whether you're creating checkout pages, generating payment links, or sending invoices via email, Stripe provides the flexibility and reliability to support your business operations seamlessly.
Stripe Payments
Stripe is versatile and can be utilized seamlessly with various eCommerce platforms. Here’s how this payment processor works when integrated.
- Flexible Payment Platform: Stripe is highly customizable, allowing you to tailor your payment process to fit your specific needs and brand. It is a great fit for businesses looking for a personalized solution.
- Smooth Transactions: Stripe handles everything from processing payments to handling refunds, ensuring that transactions are smooth and hassle-free for you and your customers. Additionally, the payment processor informs the issuing bank to transfer funds to the merchant's acquiring bank once a transaction is authorized, illustrating the role of the payment processor in facilitating the transfer of money in the payment processing sequence.
- Extensive Payment Options: It supports a variety of payment methods, including credit and debit cards, digital wallets, and local payment options, making it easy for customers to pay no matter where they are.
- Global Reach: Stripe operates in over 40 countries and supports more than 135 currencies, so you can quickly sell to customers worldwide without any extra headaches.
- State-of-the-Art Security: With features like encryption and fraud detection, Stripe ensures that all payment data is secure, giving you and your customers peace of mind.
- Developer-Friendly: If you want to customize your payment process further, Stripe offers powerful API and developer tools to integrate with your existing systems seamlessly.
- Insightful Analytics: Stripe provides detailed reports and real-time data so you can keep track of your payments and make informed decisions to help grow your business.
- Growth Scalability: Whether you’re just starting or managing a large enterprise, Stripe grows with you, offering solutions for everything from simple payment processing to more complex needs like subscriptions and marketplaces.
Disadvantages of Using Stripe
While Stripe offers many benefits, it's important to consider a few downsides.
Setting up Stripe can require some technical know-how, which might be a challenge for those without a dedicated developer. Additionally, Stripe has a strict fraud and chargeback policy that may not always work in favor of merchants, particularly if you’re dealing with high-risk transactions.
Lastly, while Stripe does offer in-person payment options through its terminal, these options are somewhat limited compared to other payment processors, which could be a drawback if your business relies heavily on face-to-face sales.
Shopify Chargebacks, Shopify Disputes, and Fraud
When the seller receives a chargeback or order inquiry notification on their merchant account using Shopify payments, Shopify collects the evidence and forwards it to the credit card company on the due date. The acquiring bank then plays a necessary role in transmitting funds from the issuing bank to the merchant's account. Typically, the resolution of a chargeback or inquiry happens within 120 days.
When it comes to fraud, Shopify Payments has filters that you can enable, such as AVS and CVV.
- Address Verification System (AVS)
The AVS helps reduce fraud by comparing the numeric part of your customer’s billing address and zip code with the information on file with their credit card issuer. This is important because unauthorized users often don’t have the correct billing details, making it harder for them to complete a fraudulent transaction.
- Card Verification Value (CVV)
The CVV is the 3- or 4-digit number on the back of a customer’s credit card. Since credit companies prohibit storing CVV codes, a stolen card usually doesn’t have all the credit card details. By asking for the CVV, you can make sure that the customer physically possesses the card, adding an extra layer of security to your transactions.
Stripe Chargeback Fees, Stripe Disputes, and Fraud Prevention Tactics
How can Stripe help merchants like you handle chargebacks and disputes?
- Chargeback Protection: If a fraudulent dispute arises, Stripe has you covered. They’ll take care of the disputed amount and waive any dispute fees—no evidence needed. Chargeback Protection costs just 0.4% per transaction.
- Stripe Radar: This machine-learning fraud prevention system is fully integrated with your payments, helping to identify and stop fraudulent transactions before they happen. Financial institutions play a huge role in this ecosystem by partnering with payment processors to offer robust fraud prevention and secure transactions.
- Dynamic 3D Secure: Want to add extra protection? Dynamic 3D Secure lets you apply authentication to high-risk transactions, helping to reduce fraud and protect your conversion rates.
- Dispute Handling: Stripe manages disputes through an automated end-to-end process that works directly with any card network, making the resolution process smoother and more efficient.
With these features, Stripe makes managing chargebacks and disputes simpler, so you can focus on what really matters—growing your business.
Pricing and Fees
Shopify
You are not required to purchase a subscription to use Shopify Payments. You can incorporate the payment processor as part of your entire Shopify commerce subscription. In fact, you can use the platform for free and enjoy your first month for only a dollar. Subscription plans start at $19 a month.
Here’s what you can expect for payment processing fees:
- For card-not-present payments, the fee is between 2.4% and 2.9% plus $0.30 per transaction.
- For card-present payments, it’s between 2.4% and 2.7% plus $0.05 per transaction.
If you’re handling in-person transactions, you’ll need a Shopify-approved card reader, which costs $59 or $299.
Stripe
Stripe can be used with various eCommerce platforms and doesn’t charge subscription fees for payment processing. Instead, you pay a commission on each transaction:
- For domestic cards, the standard fee is 2.9% of the transaction amount plus 30 cents.
If you’re an enterprise client, Stripe offers custom pricing options tailored to your needs. Accurate export and synchronization of transaction data can enhance financial reporting, improve transaction security, and aid businesses in managing payments effectively. Additionally, Stripe Radar for Fraud Teams charges 2 cents per transaction screened for fraud for added security.
Stripe vs. Shopify: Which Payment Processor Should Your Business Use?
Choosing the right payment processor can make a huge difference for your eCommerce business. Here’s a simple guide to help you decide between Stripe and Shopify Payments:
Why Stripe?
- Need custom solutions? If your business requires a flexible and scalable payment system, Stripe is your best bet. It’s perfect for handling complex payment needs and advanced features.
- Running a marketplace or complex operations? Stripe shines if you manage multiple sellers or intricate payment flows. It’s designed to handle those complexities effortlessly.
- Going global? Stripe is great if you’re operating internationally. It supports multiple currencies and payment methods, making global transactions smoother.
Why Shopify Payments?
- Already using it? If you’re on Shopify, Shopify Payments is a no-brainer. It saves you from extra transaction fees charged by third-party processors, helping you keep more of your earnings. Unlike using a payment service provider (PSP), you don't need to set up your own merchant account, which can be complex and time-consuming.
- Just starting out? Shopify Payments is perfect for new store owners. It helps you keep setup costs low and operations simple.
- Want an all-in-one solution? If you prefer a seamless and more streamlined experience, Shopify Payments works directly with Shopify’s platform, offering built-in payment processing and reducing the need for extra tools.
In short, if you’re looking for flexibility and global reach, Stripe has you covered. But if you’re a Shopify user wanting to save on fees and streamline your setup, Shopify Payments is the way to go.
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