Features, benefits, and how to account for sales correctly
As a Shopify e-commerce seller, you need to connect a payment gateway to your store so you can securely accept payments from your customers. A payment gateway essentially holds the money you receive when you make a sale. Each provider will take a small portion from each sale you make, and some will charge additional fees.
Shopify has several integration options with over 100 payment providers around the world. When choosing a payment provider, you need to consider where your business and your customers are located.
As an all-inclusive e-commerce solution, Shopify has its own payment processor called Shopify Payments. This article will help you decide whether Shopify Payments is right for your business by exploring the payment gateway’s features and the benefits of using it instead of an integrated solution – plus why you need to use an accounting connector app like A2X for Shopify.
What is Shopify Payments?
If you’ve done your own research on Shopify payment gateways, you’re probably familiar with Stripe. In 2013, through a partnership with the payment provider Stripe, Shopify Payments was created – their very own integrated payment processor.
Shopify e-commerce sellers no longer need to purchase and integrate a third-party payment processor because Shopify Payments is already integrated into your account. It allows you to start accepting credit card payments quickly and easily.
The benefits of using Shopify’s own payment solution
Shopify was the first to take the lead and create its own payment gateway specifically for its e-commerce platform. While Shopify Payments is only available in certain countries – US, Canada, the UK, Australia – if you have access to the feature, there are many advantages to using it over a third-party payment provider.
No Shopify transaction fee
Shopify currently charges between 0.2-0.5% commission on each of your sales. They’ll waive this fee if you’re a Shopify Payments provider, saving you money and boosting your profit margins.
Discounted credit card processing rates
Most payment providers will charge a flat-rate credit card fee, around the 3% mark, plus a small fee per sale – usually around $0.30. While these numbers aren’t huge, they can add up over time, especially as your store grows.
With the Basic Shopify subscription, credit card payments made by your customers will be subject to a 2.9% processing fee plus a $0.30 sale fee. However, the 2.9% processing fee decreases for those with the more comprehensive Shopify subscriptions.
Increase sales with multiple payment options
You probably sell and ship your products all over the world. Having more than one payment option has been proven to increase sales, so you can use Shopify Payments as your primary payment option, and PayPal as a secondary – great if you’re making sales in countries where Shopify Payments isn’t yet available.
Get approved instantly
Some payment providers can take weeks to approve your account and get set up, but with Shopify Payments you’re approved instantly, and the set-up process takes minutes.
Track your money in real-time
With Shopify Payments, transaction and payment management is centralised in your user dashboard, saving you from having to log in to a separate account. You have access to your pay-out schedule so you can see when your cash will be transferred to your bank account. A couple of additional features include chargeback management and fraud analysis directly from your Shopify dashboard.
Use Shopify Pay
When you’ve enabled Shopify Payments, you’ll be able to let your customers use Shopify Pay. This means customers can save their billing and shipping information, so they don’t have to re-enter the same information next time they purchase from you. A faster checkout is a great way to increase your conversion rates.
Seamless reconciliation of sales and pay-outs
While Shopify Payments is one of the most simple and seamless ways of accepting payments online, it can work even better for your business if you use an accounting connector app.
If you currently use Shopify Payments without an accounting connector app, you probably have your accounting system directly connected to your Shopify store. This means that every single transaction made in your store is directly uploaded to your accounting system. Whether you make ten sales a day, or ten thousand, this quantity of transactional data can quickly overwhelm you – and your accounting system.
A2X for Shopify imports all your Shopify transactions, including Shopify Payments pay-outs, summarises the amounts and posts the summaries to your accounting system. A2X then reconciles these summaries to your Shopify Payments bank deposits so you know everything has been accounted for accurately.
You’ll save hours of reconciling each month by automating an otherwise manual process. Its job is to bridge the data gap between your accounting system – either Xero or QuickBooks – and Shopify to ensure reliable and accurate bookkeeping. You can learn to use A2X for Shopify or even better, enlist the help of an A2X partner – accounting firms that are highly experienced with A2X and understand the complexities of e-commerce accounts.
Accept and reconcile payments easily
There are several payment gateways you can integrate with your Shopify store. Shopify Payments is a great solution if you meet the location requirements and you’re looking for a processor that will seamlessly integrate with the back end of your store – saving you time and money in the process. Plus, to make sure the right information is being sent to your accounting system, use A2X for Shopify which will generate summarised statements tied to each pay-out summary, ensuring penny-perfect reconciliation each month.