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Shopify | Choosing & Adding Payment Merchants

One question that I see asked in business groups almost daily is:

What sort of payment options do I need for my Shopify site?

No matter which payment gateway you use, there are merchant fees - it's just the way it is. I see comments like "I use Stripe, it's free" - but they actually charge 2.9% + 30c. I always recommend to my clients that they use Shopify Payments because it's easy and it's cheap.

Fees when using Shopify Payments (please note: these are NZ fees);

Basic Package (USD29/month) Standard Package (USD79/month) Advanced Package (USD299/month) 
NZ card fees 2.7% + 30c 2.5% + 30c 2.4% + 30c
Intl/AMEX fees 3.5% + 30c 3.4% + 30c 3.3% + 30c
Other gateway fees 2.0% 1.0% 0.5%


Shopify payments take a few days to settle into your account, they come into your bank as a net amount (the day's sales less the fees). So if you are using Xero or another integrated accounting software, you will need to account for the fees to gross up your sales figures.

Shopify rolled out Shop Pay to New Zealand merchants in the middle of 2020. This is essentially an alternative to PayPal. Shopify (securely) remembers the customer's credit or debit card details (and address) and allows customers to pay with one click (or tap).

The merchant fees are the same whether a customer users Shopify Payments or Shop Pay, which is why it's important to consider the fees of the alternative gateway as well as the Shopify fees if you are thinking of using a gateway like PayPal.

For example: Merchant fees for PayPal are 3.4% + 45c, so for a $100 sale, PayPal will charge $3.85 and Shopify will charge $2, so that's $5.85 of fees on the $100 transaction. If that $100 transaction is through Shopify Payments, the fee will be $3. So that is something to consider when choosing other payment gateways.

Activating Shopify Payments

Go to Settings > Payments and click Activate Shopify Payments

Click Activate Shopify Payments

You will need to enter your business details as requested and then click Complete account setup

Activating Shop Pay

Shop Pay is Shopify's answer to PayPal and if you are not already using it on your Shopify store I recommend you get that sorted ASAP. What it means is that your customers can buy online with a couple of taps - no need to find their wallet and dig out their debit or credit card.

Go to Settings > Payments and click on Manage then in the Shop Pay section tick the box beside Shop Pay.

Buy Now, Pay Later Options

Shopify has released Shop Pay Installments in America - allowing customers a one click payment option with 25% up front and the rest of the purchase paid off in three interest free installments.

New Zealand Shopify merchants were supposed to have this rolled out early in 2021, but as yet there is no word when we can expect this functionality - I am waiting with anticipation to see what the fees will be.

It is a (very) good idea to have at least one buy now, pay later option for your customers. LayBuy and AfterPay seem to be the most popular with New Zealand customers - but they also have the highest merchant fees.

LayBuy, AfterPay and PartPay (now known as Zip) like your site to be live before they will give you a quote for fees. Quotes vary depending on your business, your estimated average order value and your estimated monthly sales.

The new kid on the block (kinda) is HummHumm is the rebrand of Oxipay and they have two options: Big Things and Little Things. Little Things is a great option for standard ecommerce retailers (they offer credit for purchases up to $1,000).

Big Things is a great option if you are selling services or courses online. You will speak to an account manager who will assess the suitability of your services and then customise a limit for your clients (up to $10,000).

Buy Now, Pay Later Installments

Each buy now, pay later provider offer different installments;

LayBuy 16.67% payment upfront (1/6) Five weekly installments
AfterPay 25% payment upfront Three fortnightly installments
Zip 25% payment upfront Three fortnightly installments
Humm 20% payment upfront

Five fortnightly installments, or

Ten weekly installments

Activating PayPal Express Checkout

Go to Settings > Payment providers and click Activate PayPal Express Checkout

Activate PayPal Express Checkout

You will need to add all of your PayPal account information. If you haven't already set up a business account for PayPal you will need to do this before you activate PayPal.

Activating Other Payment Gateways

Go to Settings > Payment providers and under Alternative payment methods click on Choose alternative payment.

Choose alternative payment

Under here you will find AfterPay and LayBuy, but you will need to follow the instructions from PartPay/ZipPay to see this as an option in the list.

You will need to enter your Merchant ID and Secret Key for AfterPay and you will need to enter your Merchant ID and API Key for LayBuy.

You will also be given a snippet of code from LayBuy and AfterPay that you will need to paste into your theme, if you don't feel confident doing this, a representative from these providers can request a login to your Shopify store and add this for you.

If you need help deciding what payment gateways are best for your business or you think your Shopify site could be doing a better job of converting customers, please get in touch and I can help you out.


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