So, you’ve just set up an online store on Shopify with Shopify Payments and are trying to wrap your head around the various fees?
Well, look no further!
In this quick and easy guide, we’ll tell you all you need to know about Shopify Payments fees. We’ll also show you how to use Reconcilely to help you manage your new business automatically.
The better you manage your business finances, the easier it becomes to grow your business and make even more money online.
What Are Shopify Payments Fees?
First things first, what are Shopify Payments fees? And how do they work?
Shopify Payments is an integrated eCommerce payment platform. It acts as an alternative to other third-party payment options like PayPal or Amazon Pay.
Essentially, Shopify Payments is a platform that transfers customer payments into your bank account.
Since Shopify developed Shopify Payments, it has become quick and easy to add various convenient payment options at the checkout.
Shopify Payments ensures that your customers can pay you for your goods and services without using a third-party app.
Customers love the convenience, and you’ll find it easier to increase your sales by offering numerous, easy-to-use payment options.
Now, Shopify Payments fees are the charges you pay to cover the cost of processing that payment.
Shopify charges you the fees in exchange for using their platform.
How much you’ll end up paying depends on the type of credit card you and your customers are using and the location your business is registered at.
For example, if you have a VISA card in Ireland, the fees might differ from using an American Express card in Canada.
Now that we know what Shopify Payments fees are, let’s look at how they work.
How Do Shopify Payments Fees Work?
Shopify Payments rates are pretty simple to understand.
When using Shopify Payments, your customers will select a range of payment options you’ve previously made available.
As your customers use the Shopify Payments platform, Shopify may charge you any of the following four fees:
- Payment processing fees (Domestic): These fees are the costs of processing credit cards issued within the same country as your store.
- Payment processing fees (Cross border): These fees are like those mentioned above. However, they apply to international credit cards. For example, if you want to process a credit card issued in London but your store is located in New York, you’ll pay cross-border processing fees.
- Transaction fees: These fees are the most common. As the name suggests, transaction fees are charged when processing a payment, refund, or other financial transaction. How much you end up paying will depend on your store’s Shopify subscription plan.
- Conversion fees: The conversion fees charged by Shopify are to pay for the service of converting currencies when capturing a payment. The currency conversion fee is 1.5% in the US and 2% in other countries where Shopify Payments is available. If your store isn’t international, you won’t have to worry about paying for it. However, if you’re looking to expand, you should consider this.
How much you end up paying will depend on how much you use the plethora of services that Shopify Payments offer. The more your customers use the Shopify Payments options to pay for your goods or services, the higher your fees will be.
In other words, if your business does well, it is likely that your fees will be higher. Luckily, it is a small price to pay for online success and endless convenience.
Shopify Payments And Reconcilely
Shopify Payments is an effective way to ensure that your customers can easily make purchases from your store.
However, you still need to reconcile the purchases and their associated fees. When you effectively reconcile every transaction, you’ll know precisely how well your Shopify store performs.
With Reconcilely, you’ll be able to manage these purchases, fees, and reconciliation with ease.
Reconcilely is the perfect app to help you automate your eCommerce finances.
With our app, you can export your payouts into individual invoices and ensure that they are synced with your accounting system. In simple terms, it opens the door between Shopify and your Shopify accounting app, like Xero or QuickBooks.
With Reconcilely, you can categorize your payments into shipping fees, Shopify Payments fees, gift cards, refunds, and much more.
Reconcilely is fantastic for automating all the manual adjustments Shopify needs to reconcile payouts. This saves you valuable time and effort. It streamlines the process and automatically tracks the gains and losses of your various accounts. With Reconcilely, you stay on top of your finances and bookkeeping at all times.
Reconcilely And Xero
The best thing about Reconcilely is that it seamlessly integrates with Xero, one of the top Shopify accounting platforms.
Reconcile will automatically sync your Shopify transactions with Xero. This automatic, real-time syncing ensures that all Shopify orders are merged and adjusted to your Xero accounts.
When it’s easier for you to reconcile your accounts, running your business and organizing your finances becomes more efficient. It also saves you time and money!
Linking your Reconcilely and Xero accounts to Shopify is as simple as logging in and connecting.
The process shouldn’t take more than a moment. Once you’ve got everything set up, you’ll easily be able to set up critical features like account mapping and begin summarizing your Shopify payout data.
Reconcilely plans start at $9 per month, which is pretty affordable. We also offer a free 14-day trial for users who want to try our services before committing.
Understanding the ins and outs of Shopify Payments fees is an essential skill that all new online business owners need to master.
Luckily, navigating these fees becomes a breeze with the right accounting apps in your arsenal!
Reconcilely, in partnership with Xero, handles all your financial needs without breaking the bank.
You can quickly sign up now and enjoy a free 14-day trial. When you use Reconcilely, you’ll know exactly how much you’re paying in Shopify Payments fees.