Every eCommerce store needs a payment gateway to take payment from its customers, so finding the right Shopify payment gateway is business-critical. In this post, we’re exploring:
what’s a payment gateway & why do I need one?
questions to ask when choosing a Shopify payment gateway, and
our top picks for Shopify payment solutions in the UK.
Show me the money: what’s a Shopify payment gateway & why do I need one?
Don’t let the fancy name intimidate you! As Shopify explains…
“A payment gateway is a payment processing technology that communicates transaction information between the customer and the merchant.
You need a payment gateway in order to securely accept credit and debit card payments from your customers, both online and in person. The payment gateway ensures payment data is securely transmitted from the customer to the merchant, protecting all entities involved.”
So, in a nutshell, Shopify payment gateways:
facilitate secure credit and debit card payments when your customers make a purchase,
protect both you and your customers because all payment data is communicated securely, and
as such, they are essential for all eCommerce sites.
Avoiding buyer's remorse: questions to ask when choosing a Shopify Payment Gateway.
“If a client is looking to replatform to Shopify Plus, we address the subject of Shopify payment gateways during the project discovery phase,” says Richard Ayles, Head of Development at blubolt. “This allows plenty of time to explore the clients’ particular requirements and ensure we’ve selected an appropriate solution.”
So to avoid buyer's remorse, consider:
1. Availability in your location.
Start with a process of elimination, as some Shopify payment gateways only work in specific regions! Check on Shopify’s site to see which payment gateways are available in your region before doing any other research. For example, we work with UK-based companies and check Shopify’s list of UK providers.
2. Conducting a quick competitor audit.
It’s always a good idea to keep an eye on the competition. So it’s worth checking what payment gateways they are using. Along with brands in your own vertical, you could also check brands with similar requirements (they rely on subscriptions, for example).
As with any aspect of managing your eCommerce site, pricing is one of the top considerations when choosing a new provider. However, don’t get caught out by failing to research your options, as you could negatively impact your profit margin. For example, some providers may have higher transaction rates but no monthly fee. Also, watch out for those extra fees!
To summarise, for each potential provider:
Check rates per transaction,
Check monthly fee/payment (if any),
Additional fees like annual fees, chargeback fees or cancellation fees, and then
Weigh up which pricing structure offers the best value for your brand, factoring in which features you need and which option is more profitable for your brand at its current size and with its current requirements.
4. Potential for international expansion.
While you may be trading in the UK only right now, there’s no harm in thinking big and future-proofing your site!
Shopify is known as a fantastic eCommerce platform for international expansion. With that in mind, it makes sense to ensure your Shopify payment gateway can deliver on that too. So it’s essential to choose a payment gateway that serves your current market well and has the potential for international expansion in markets relevant to your audience.
5. Types of payment gateways.
Another consideration is to understand the different types of Shopify payment gateways. With Shopify, there are three types:
Hosted: With this type of gateway, also known as a redirect payment gateway, your customers are taken off your site to the payment gateway page. Following payment, the gateway redirects them back to the right stage of the checkout process on your site.
Self-hosted: As the merchant, you collect payment data on your site and send it to the third-party payment gateway in the backend. The payment is processed off-site.
Non-hosted: As the merchant, you both collect and process the payment on-site. Bear in mind that this payment gateway is more common with larger brands because of its technical nature and the ongoing maintenance required.
6. Time to launch.
Unsurprisingly, the time from choosing your payment gateway to launching it will vary by provider and the complexity of your requirements. For example, Shopify Payments and PayPal are fast to set up, whereas others may take around four weeks. As already mentioned, at blubolt, we explore all the options in the discovery phase of a new build which gives us ample time to set up a new provider in time for launch.
Our top UK Shopify Payment solutions.
Now that we’ve covered the key questions to ask, it’s time to look at our top UK Shopify payment solutions.
1. Shopify Payments
If you’re using the Shopify eCommerce platform, you’re automatically set up to access its payment gateway, Shopify Payments. With Shopify Payments, you can accept all major payment methods as soon as you create your Shopify store (so there’s no set-up fee), and it removes the need to set up a third-party provider. Payments take up to 3 days to arrive. Another bonus is being able to see your transactions in the Shopify admin (not available for external providers).
In terms of pricing, you’ll also avoid the transaction fees that Shopify charges for other third-party payment gateways. Instead, you’ll just be charged for your standard store subscription fee and credit card fees (Basic plan - 2.2% + 20p, Shopify plan - 1.9% + 20p, and Advanced Shopify - 1.6% + 20p).
Fortunately, PayPal is one of Shopify’s default payment providers. As a result, once you open a Shopify store, you're given a PayPal Express Checkout account with the email you used to sign up for your Shopify store. Simply set up your PayPal account to start collecting payments for orders made with PayPal. Generally, it’s a user-friendly process and usually takes less than a day to set up an account.
Unless you also activate Shopify Payments, you're charged transaction fees each time a customer purchases using this payment method. If you enable Shopify Payments, you aren't charged transaction fees on orders for stores located in most countries.
Pricing plans vary, but for a standard commercial translation in the UK, you’re charged 2.9% plus £0.30 for each transaction.
Worldpay is the UK's biggest payment provider, with over 250,000 SME businesses using it. In addition, Worldpay operates in over 40 countries and supports more than 120 currencies.
With a promise of being able to start taking payments within 24 hours, Worldpay offers three tiers for payments:
Standard - From £19pm with 350 transactions included.
Advanced - From £45pm with 850 transactions included.
Enterprise - fully bespoke arrangement with the lowest transaction fee based on volumes.
In terms of other associated costs, Worldpay offers:
No set-up fees,
No charges to accept payments in foreign currencies,
Zero fees to process refunds (but the fee for processing the original order still stands),
Zero charges to offer subscriptions or to store customers' card details for future use,
£15 administration charge for a chargeback, and
£29.99 per year for PCI compliance certification.
Stripe bills itself (no pun intended!) as a payment provider for businesses of all sizes with transparent pricing. Along with online and in-person payments, Stripe is also known for its straightforward set-up of recurring billing and direct debits, perfect for those businesses in the subscription market.
Pricing wise, Stripe has no set-up or monthly fees as you pay by transaction:
1.4% per transaction plus 20p for UK cards (plus 1.1% per transaction for European Economic Area)
2.9% per transaction plus 20p for international cards
5. Amazon Pay
With an estimated 56% of UK households having access to an Amazon account, giving customers the option of paying via their Amazon account is an easy way of streamlining the purchasing process. Amazon Pay is available worldwide, so it has fantastic expansion potential. On the downside, it will take between 3-5 business days to complete the payment and appear in your bank account. You’ll also need to factor in whether the cost of using Amazon Pay is worthwhile if you have a lower volume of transactions.
Amazon Pay costs start 2.9% fee plus a $0.30 per transaction for desktop or mobile. For an international transaction, costs start from 3.9% and $0.30 per transaction for desktop or mobile.
6. Opayo (formerly Sage Pay)
Formerly known as Sage Pay, Opayo is well known in the UK and US markets and processes over £40bn worth of card payments for over 50,000 merchants, online and in-store.
For online stores, Opayo has three price tiers and no set-up fees:
Flex - from £25 p/m, which includes 350 transactions per month.
Plus - £45 p/m, which includes 500 tokens per month (Opayo tokens allow your customers to save their card details for future use), and once you’re above the 350 transactions threshold, you’ll pay from 9p per transaction.
Corporate - Bespoke Pricing for 3000+ transactions per month at a fixed rate per transaction.
7. Shop Pay Installments
On a different tangent, Shop Pay Installments operates on a ‘buy now, pay later’ model. This form of payment can also improve conversion rates and average order value because customers don’t necessarily have to pay for their order all at once.
Shop Pay Installments offer your customers more flexibility at the checkout. It lets customers choose between four interest-free payments every two weeks and monthly instalments for up to 12 months. With this option, you won't pay any additional charges, interest rates, or late fees passed on to customers for these Shop Pay orders. You'll also get paid upfront (excluding fees) for the customers’ orders, and the customer stays on your site throughout (no redirects).
Klarna is another payment gateway with a ‘buy now, pay later’ model, which helps businesses of all sizes attract, convert, and retain customers with flexible payment options. Like Shop Pay Installments, merchants get payment for the customers’ orders immediately, so there’s no risk even if the customer defaults. You pay 2.49% plus £0.20 per transaction (varies for international payments) in terms of pricing.
It enables merchants to offer customers four main product options:
Pay in 3 (interest-free instalments),
Pay in 30 days, and
Financing (up to 36 months to pay).
All paid-up: the top Shopify payment gateways.
While choosing a Shopify payment gateway may seem daunting to start with, we hope the above information has boosted your knowledge and confidence! You’re bound to be more thorough in analysing each option by answering our quick questions before starting your research. And remember, if you have any further questions, you can get in touch with us. With hundreds of eCommerce builds to our name, we’re well qualified to offer advice!
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