Seamless payment processing is a crucial element for every online business, whether it’s a burgeoning startup or a multinational corporation. Various platforms offer different features and experiences, making the choice of a payment gateway a significant decision for businesses of all sizes.
Among the most popular and reputable platforms in the market are Stripe and Shopify Payments.
Stripe, a technology company providing economic infrastructure for the internet, has established itself as one of the leading payment processors, thanks to its versatile and developer-friendly services.
On the other hand, Shopify Payments, an integral part of the widely used Shopify eCommerce platform, provides an easy-to-use and seamless transaction experience for both the business and the customer.
But when it comes to choosing between Stripe and Shopify Payments, which one is the better fit for your business? The answer to that question depends on various factors, including your business’s size, its specific needs, and the geographical locations of your customers.
Stay tuned as we unravel the complexities of online payment processing, making it easier for you to navigate the world of eCommerce and digital transactions.
What is Stripe?
Launched in 2010 by Irish entrepreneurs Patrick and John Collison, Stripe started as a software payment platform aimed at simplifying online credit card payments for businesses of all sizes. Over the years, it has evolved into a comprehensive economic infrastructure for the internet, powering billions of dollars’ worth of transactions annually.
Stripe’s core business revolves around providing APIs (Application Programming Interfaces) that enable businesses to accept and process payments online. Its services cater to a wide array of small businesses, from small startups to large corporations, providing them with the tools they need to handle online transactions seamlessly.
Stripe operates globally and supports over 135 different currencies, making it a viable choice for businesses with an international customer base. Its customer portfolio includes big names such as Amazon, Slack, and Lyft, but its scalable solutions make it equally suitable for smaller businesses and startups.
What is Shopify Payments?
Shopify Payments is the in-house payment processing gateway of Shopify, one of the world’s leading eCommerce platforms. Launched in 2013, it was designed to offer a streamlined, user-friendly payment solution for businesses using the Shopify platform.
The major advantage of Shopify Payments lies in its seamless integration with a business’s Shopify store. When using this gateway, business owners don’t have to set up and maintain third-party payment service providers or merchant accounts, thus eliminating the potential complications and delays in receiving and accepting payments. Plus, Shopify Payments is automatically set up when you create your Shopify store, which simplifies the setup process significantly.
With Shopify Payments, businesses can accept and manage all major forms of payment, including credit and debit cards, and some digital wallets. It also supports several alternative payment methods like Shop Pay, Apple Pay, and Google Pay, allowing businesses to cater to a wide range of customer preferences.
Shopify Payments supports transactions in multiple currencies and is available in several countries worldwide. It includes features and functionality like automatic fraud analysis, making it a secure option for businesses and their customers alike. Furthermore, the platform provides in-depth financial reports, giving merchants valuable insights into their sales and transaction history.
While Shopify Payments is most beneficial for businesses that operate on the Shopify platform, it’s worth noting that its use is mandatory for Shopify users in supported regions unless they opt for another payment gateway and accept the additional transaction fees.
Shopify Payments vs Stripe: The Differences
While both Stripe and Shopify Payments are robust and reliable online payment solutions, there are key differences between the two that can influence which one is a better fit for your business.
- Payment Processing
Stripe and Shopify Payments differ in terms of their approach to payment processing. Stripe provides flexible, developer-friendly APIs that can be integrated into virtually any app or website, giving businesses the power to customize their checkout experience extensively. On the other hand, Shopify Payments is directly integrated with Shopify stores, offering a seamless and straightforward experience for Shopify users without the need for extensive customization.
- Available Currencies and Countries
Stripe operates in more countries and supports a larger number of currencies compared to Shopify Payments. As of my knowledge cutoff in September 2021, Stripe supports over 135 currencies and is available for businesses in 44 countries, making it a more suitable choice for businesses with a significant international customer base. Shopify Payments, while also supporting multiple currencies, is available in fewer countries.
- User Experience and Interface
Shopify Payments provides a seamless and user-friendly experience, especially for businesses already using Shopify. Everything is pre-integrated into the Shopify admin panel, making it easy to manage transactions, refunds, and payout reports. Stripe, while not difficult to use, requires a bit more technical knowledge, especially for customization. It is highly favored by developers due to its extensive APIs and comprehensive documentation.
- Integrations and Partnerships
Both Stripe and Shopify Payments offer a variety of integrations. Stripe has an edge with its compatibility with a vast number of platforms, allowing businesses to incorporate it into virtually any website or app. Shopify Payments, however, is deeply integrated into the Shopify ecosystem and pairs exceptionally well with other Shopify services, such as Shopify POS and Shopify’s online store builder.
The Pros and Cons of Stripe
Like any platform, Stripe comes with its own set of advantages and disadvantages that can affect how well it suits a business’s needs.
Pros of Using Stripe
- Extensive Customization: With its robust APIs, Stripe provides businesses with a highly customizable payment gateway. This allows developers to tailor the platform to a business’s unique needs, creating a payment experience that aligns perfectly with the brand and its customers.
- Global Reach: Stripe operates in many countries worldwide and supports over 135 currencies, making it a strong contender for businesses serving international markets.
- Wide Array of Payment Options: Stripe accepts all major credit and debit cards, and supports a variety of digital wallets and local payment methods. This flexibility can enhance the checkout experience for customers.
- Additional Business Services: Beyond payment processing, Stripe offers additional services like Stripe Atlas (for starting a business), Stripe Capital (for business loans), and Stripe Radar (for fraud detection), which can help businesses streamline their operations.
Cons of Using Stripe
- Technical Knowledge Required: While the customizability of Stripe is a significant benefit, it can also be a drawback for businesses with limited technical resources. Implementing Stripe’s APIs and making full use of its capabilities requires a certain level of programming knowledge.
- Payout Time: In some regions, Stripe’s payout schedule can be longer than other payment processors, which means it can take more time to see funds deposited into your bank account.
- Cost Structure: While Stripe offers competitive pricing, the costs can accumulate with its pay-as-you-go model, especially for businesses that process a high volume of transactions.
The Pros and Cons of Shopify Payments
As with any platform, Shopify Payments has its own set of strengths and potential drawbacks. Understanding these can help determine if it’s the right fit for your business.
Pros of Using Shopify Payments
- Seamless Integration with Shopify: For businesses using Shopify as their eCommerce platform, Shopify Payments offers seamless integration. There’s no need for additional setup or third-party accounts, simplifying the overall payment process.
- No Additional Transaction Fees: When using Shopify Payments, businesses can avoid the additional transaction fees that Shopify imposes when using other payment gateways.
- Multiple Payment Options: Shopify Payments accepts all major credit cards and offers customers several popular payment methods, like Shop Pay, Apple Pay, and Google Pay.
- Chargeback Management: Shopify Payments includes a feature to help manage chargebacks, providing merchants with a streamlined process to respond to and resolve chargeback disputes.
Cons of Using Shopify Payments
- Limited Availability: As of September 2021, Shopify Payments is not available in every country. For businesses located outside of the supported countries, it isn’t an available option.
- Restrictions on Certain Business Types: Shopify Payments has restrictions on certain business types and products, as per their terms of service. Businesses dealing in these categories might not be able to use Shopify Payments.
- Potential for Account Holds: Like many payment processors, Shopify Payments reviews transactions for fraudulent activity. If a transaction or your business raises flags in their system, there can be holds or delays on funds.
Comparing the pricing structures of Stripe and Shopify Payments can provide a clearer picture of which platform might be more cost-effective for your business. Here’s an overview of how each platform’s pricing breaks down.
Stripe’s Pricing Structure
Stripe follows a straightforward and transparent pricing model. For online transactions, Stripe charges a standard fee of 2.9% + 30¢ per successful transaction. For in-person payments using Stripe’s point of sale hardware and software, the fee is 2.7% + 5¢ per transaction.
Stripe also offers customized pricing for businesses with large volume or unique business models. Additional services such as Stripe Radar (for fraud detection) or Stripe Atlas (for business formation) come with their own separate costs.
Shopify Payments’ Pricing Structure
Shopify Payments’ transaction fees vary depending on the Shopify plan that your business is on. Shopify offers several plans, including Basic Shopify, Shopify, and Advanced Shopify.
- For the Basic Shopify plan, the online credit card rates are 2.9% + 30¢, and the in-person transaction rates are 2.7%.
- The Shopify plan offers online rates of 2.6% + 30¢, and in-person rates are 2.5%.
- With the Advanced Shopify plan, the online rate is 2.4% + 30¢, and the in-person rate is 2.4%.
With Shopify Payments, you also avoid an additional transaction fee that Shopify charges when using other payment providers (ranging from 0.5% to 2%, depending on your Shopify plan).
When choosing between Stripe and Shopify Payments, consider not just the standard card processing fees, but also the added value each platform brings. This could include ease of use, seamless integration, customization options, global reach, additional services, and the nature of your business operations. Additionally, keep in mind that pricing models may have changed since my last training data in September 2021, so always check the most recent information from the official websites.
Security is a primary concern for businesses and customers when it comes to online transactions. Both Stripe and Shopify Payments offer robust security measures to protect sensitive data.
Stripe’s Security Measures
Stripe takes security very seriously. The platform is designed to meet the most stringent industry security standards. It’s certified as PCI Service Provider Level 1, the highest level of certification in the payment card industry. All transactions are encrypted using Secure Socket Layer (SSL) technology and card details are never stored on a merchant’s server.
In addition to these, Stripe provides a suite of fraud detection tools. Stripe Radar uses machine learning to detect and prevent fraudulent transactions, while allowing legitimate ones to go through. Businesses also have the option to implement two-step authentication, providing an extra layer of security.
Shopify Payments’ Security Measures
Shopify Payments also maintains high security standards. Like Stripe, it’s PCI Service Provider Level 1 certified, ensuring all transactions meet the industry’s strict security standards. All data is encrypted and securely stored.
Shopify also provides its own set of fraud prevention tools. It includes a feature called Fraud Protect for Shopify Payments, which automatically identifies and protects merchants from fraudulent chargebacks. However, this feature is only available to eligible U.S. merchants.
In terms of security, both Stripe and Shopify Payments strive to provide a safe environment for online transactions. However, each platform offers different tools to detect and manage fraudulent activity, which can play a role in deciding the best fit for your business.
Effective and accessible customer support is a crucial element to consider when choosing a payment processor. Both Stripe and Shopify Payments offer various channels for support, but their approach and availability can differ.
Stripe’s Customer Support
Stripe offers comprehensive support resources including a detailed Knowledge Base and documentation that answers most queries and provides extensive guidance for developers. For direct support, customers can reach out via email or chat.
Stripe doesn’t offer phone support, which may be a downside for some businesses.
Stripe also provides support via social media platforms like Twitter and has an active community where users can share experiences and solutions. This combination of resources ensures that businesses can find answers to their questions in multiple ways.
Shopify Payments’ Customer Support
Shopify Payments’ customer support is provided through Shopify’s support channels. This includes 24/7 phone and chat support, a significant advantage for businesses that need immediate assistance. They also offer email support, a Help Center, community forums, and various social media channels.
In addition to this, Shopify provides a range of educational resources such as guides, tutorials, and webinars, ensuring users can make the most of their platform.
When considering customer support, think about your business’s needs and preferences. If 24/7 phone support is crucial for your operations, Shopify Payments has the edge. If self-service resources and community solutions are more your style, Stripe’s extensive Knowledge Base and active community might appeal to you more.
Stripe vs. Shopify Payments: Which One is Right for You?
Choosing between Stripe and Shopify Payments depends largely on your business’s specific needs and the eCommerce platform you’re using. Here’s a general guide to help you decide:
Choose Stripe If
- Customization is Key: Stripe’s robust APIs make it highly customizable, offering flexibility that can be vital for unique business models. If you have specific requirements for your payment process and have the technical resources to implement them, opening a Stripe account is a compelling choice.
- You Operate Internationally: Stripe operates in more countries and supports more currencies than Shopify Payments. If you’re looking to cater to a diverse, global customer base, Stripe may be the more fitting option.
- You’re Not on Shopify: If you’re using an eCommerce platform other than Shopify, or if you’re not running an eCommerce business, Stripe’s compatibility with a wide range of platforms and apps makes it a versatile choice.
Choose Shopify Payments If
- You Use Shopify: If your business is already using or planning to use a Shopify account as its eCommerce platform, Shopify Payments offers seamless integration, simplifying your payment process.
- You Prefer an All-in-One Solution: Shopify Payments is tightly integrated with other Shopify services, providing a holistic solution for your eCommerce needs. If you’re looking for convenience and an all-in-one platform, Shopify Payments could be the right fit.
- You Want 24/7 Phone and Chat Support: Shopify Payments, through Shopify’s support channels, offers round-the-clock phone and chat support. If instant access to support is crucial for your business, this may be a deciding factor.
Remember, it’s crucial to consider your business’s specific needs, target markets, technical resources, and operational requirements when deciding between Stripe and Shopify Payments. Both platforms are robust and reliable but offer different features and capabilities that may align more closely with different business models. It’s advisable to thoroughly research both platforms, take advantage of any available free trial periods, and perhaps even consult with a financial advisor or eCommerce consultant to make the best decision.
The Best Credit Card Processing Solution Might Be Something Else Entirely…
Whether you choose Stripe or Shopify Payments, both platforms offer robust and reliable services that can help streamline your online payment processing. The decision ultimately boils down to your specific needs and how each platform aligns with your business model.
Don’t forget: there are other third-party providers like PayPal that might suite your needs better.
Remember, online businesses – particularly those in high-risk industries – face unique challenges in securing and maintaining a reliable payment processing solution. High-risk businesses, such as those in the dropshipping, adult entertainment, nutraceuticals, or CBD industries, often encounter hurdles with standard payment processors.
If your business falls into this category, or if you’re looking for a customized solution that takes into account the unique challenges of your business, opening a high-risk merchant account with DirectPayNet could be an excellent move.
DirectPayNet specializes in providing merchant services for high-risk businesses and has years of experience navigating the complexities of high-risk payment processing. By offering a range of services tailored specifically for high-risk merchants, DirectPayNet could be your ally in securing a robust, reliable, and compliant payment solution.
Contact DirectPayNet today and take the first step towards secure, reliable, and compliant high-risk payment processing.