We're a Canadian business which sell 85% to the US. We've been looking into setting up own our webstore for a while and looked into Shopify to easily manage our eBay and Amazon market inventory at one spot including our own store.
However, I have a dilemma whether to sign up on Shopify US or Canada. As I've seen many sellers debate whether to set up 2 stores or multicurrency etc, we're looking forward to the feature which could let us set separate pricing depending on the country. Therefore, at the moment we would probably choose to sell in USD on Shopify. However, should I then sign up on Shopify US or Canada? Even if I set up to charge credit card in USD, would the US credit card charge the "foreign transaction fee" on my customers? As a Canadian, I know our Canadian credit cards do not charge this fee (or just merge it in the total), but my US credit card had had charged this fee even though I bought in USD on a (I thought) US website.
I do not want my customer to be unpleasantly surprised with the extra charge. However, I do want the USD I received to be deposited into my Canadian US Dollar bank account. Could someone answer this question?
Elias here with Shopify Support. Thank you for reaching out.
Typically, if you're using Shopify Payments, we'd recommend setting up your store to sell in multiple currencies. Selling in multiple currencies with Shopify Payments in Canada allows you to change your payout currency to CAD or USD, so you can receive your funds in USD. Shopify Payments in the US can also sell in multiple currencies, but the payouts is only in USD.
Since the primary concern is the foreign transaction fees, you can set up your store on Shopify US and use a Canadian USD bank account. This way, your US customers won't be charged for foreign exchange fees. However, I do need to clarify that I have seen foreign exchange fees on my Canadian credit card on US purchases before, so it's important to note that your Canadian customers may end up seeing the foreign exchange fees on their transactions.
Whether you chose to sell in USD with Shopify US or Canada, you'll be able to connect your Canadian USD bank account and receive the funds in USD with both scenarios. However, the best option to avoid unpleasantly surprising your customers (US and Canada) and to be able to set separate pricing based on countries is to open separate stores. As you're already aware, many businesses do this and they often incorporate multiple domains (eg. .com and .ca) as well.
I hope this helps! If you have any other questions on this topic, don't hesitate to let me know!
I have a few questions about the store setup you talk about above:
1) Can a Canadian open a US based store with Canadian address and Canadian bank account (USD bank account) only? Basically no connection to the USA other than 95% of our customers are American.
2) With Americans buying from this Shopify store, will we be subject to the domestic credit card fee or international credit card fee?
3) With Canadians buying from this Shopify store, will we be subject to the domestic credit card fee or international credit card fee?
4) Will there be any exchange rate conversion fees? All customers will be required to pay in USD and we will deposit our earnings directly into a Canadian USD bank account.
I am aware that Canadians purchasing items in the store with a Canadian dollar credit card will need to pay a conversion fee to their credit card company. I just want to minimize my fees as much as possible.
Thank you for joining the thread!
I understand you have several questions regarding payment processing, and I'll try my best to answer them in the same manner.
1) If you're using Shopify Payments, you can set up your store to process in USD and connect a USD Bank account from a Canadian bank. Another option to consider is setting up your store for multiple currencies, which allows you to process both USD/CAD and get paid in your local currency.
2) Since your store is located in Canada, international and American Express credit cards would still be subject to the international credit card processing fees. If you'd like more information on this, you can view the plan features and fees on our pricing page.
3) Canadian credit cards will be subject to domestic credit card processing fees.
4) Since your store is set up for USD and connected to a Canadian USD bank account, US customers would not incur a conversion fee.
I think the best way to handle the currency for both of your customers' region is by setting up your store in CAD and enabling multiple currency. While multiple currency does convert the payouts to CAD, the currency exchange and conversion fee happens on a payout level and does not affect your customers - this would help minimize the fees for your customers.
Have you had the chance to look at the multiple currency option?
Thank you for joining the thread!
I understand you're also looking to resolve the problem of selling to US from Canada. Aside from the information that's already discussed in the thread, did you have any other specific questions on this topic?
Did you already create your store using our free 14-day trial (https://bit.ly/2LJ7aas)?
My shop is about to go live in about 14 days.
I don't quite understand the questions you answer above #2 & #3
The store is in US + the currency charged is in the USD = payout to a US DOLLAR checking account IN CANADA.
In this scenario:
1. Why would the customer incur international transaction fees when the processing currency and the payout currency is the same? The store is only Incorporated in Canada but it's a Shopify us-based store.
2. As for my interpretation the merchant should also not be charged the 2.99% currency conversion fee during payout.
3. All Canadian buyers we'll see an international transaction fee
The store is in US + the currency charged is in the USD = payout to a CAD checking account IN CANADA.
1. Again as for my interpretation in this scenario only the merchant should be charged the 2.99% currency conversion fee during payout.
2. All Canadian buyers will see an international transaction fee
This is what I understood from what's on your website about Shopify payouts!
Is this right?
Thank you for joining the thread!
The question above is for a store located in Canada selling in USD and receiving the payouts in USD, so they are using Shopify Payments (Canada). In their case, there is an international credit card processing fee for American Express and international/US credit cards. However, in the two scenarios you've mentioned, it seems that your business is in the US where CAD payouts wouldn't apply.
If you meant to say that your store is Canadian-based but selling in USD and, assuming you are using Shopify Payments (Canada), then you do have the option to receive your payouts in CAD or USD. It's important to note that US-based stores using Shopify Payments (US) does not have the option to receive payouts in a different currency. For more information on this, you can refer to Shopify Payments - Supported currencies.
1. There is a credit card processing fee because you would be using Shopify Payments (Canada).
2. There wouldn't be a conversion fee charged to the merchant if your funds are paid out in USD.
3. Canadian customers will be subject to a domestic processing fee.
1. There is a conversion fee because the US funds are converted to CAD when paid out.
2. While Canadian buyers are paying in USD and there is a conversion fee from their credit card - they are subject to the domestic processing fees because the processing gateway is Shopify Payments (Canada).
I hope this clarifies your questions! If you have any other questions on this topic, don't hesitate to let me know!
Sorry but your explanation isn't very clear or precise.
How do I know if my store is "US-based" or "Canada-based"?
Can you please tell me
1. How do I become a US-based store so my US customers (The majority of my target market) do not incur international currency processing fees? i.e I want to charge in USD [I understand that my Canadian and customers around the world will incur credit card international transaction fees]
2. I want to get paid out in USD in a US dollar checking bank account in Canada to avoid conversion fee at payout.? [Does Shopify consider this as payment in USD or does it still consider in CAD because the bank is in Canada?]
Thanks for the follow-up!
To help determine if your store is US or Canada-based, could you confirm if you are operating out of the US or Canada? It's worth noting that based on where you're operating from, you may be required to provide government issued documents and/or remit taxes in your country.
1. Based on the scenarios you've mentioned, it sounds like you're located in Canada and you want to sell in USD - is this correct? If so, then you can change your store currency to USD and connect a USD bank account from a Canadian bank. In this case, you would be using Shopify Payments (Canada) and processing in USD. However, while this would still be international credit card processing fees, the fee is charged to the merchant and not your US customers.
2. You can receive your payouts in USD using a USD bank account from a Canadian bank and there would not be a conversion fee. With this setup, the only fee you're subject to is the credit card processing fees if you're using Shopify Payments.
If you have any other questions on this topic, don't hesitate to let me know!