My company isn’t based in any of the countries that Shopify Payments is available, so I’m destined to go ahead with a 3rd party payment gateway provider in order for me to receive payments through card.
In order to do so, I have gone ahead with a local payment gateway provider, however, they are charging me 3.9% per transaction. I want some help in order for someone to explain how Shopify will be charging their own fees in addition to my 3rd party provider because as they showcase they have 3 different types of charges (as attached below), so if someone is kind enough to breakdown the following categories in order for me to understand my costs much clearer on each transaction.
My questions are:
What’s the difference between “online credit card rates” and “In-person credit card rates”?
Would the fees differ between a credit card and a debit card payment?
Is the 2% taken for every transaction, that is including Cash on Delivery (COD) Payments as well?
If somene can please reply to the above questions, it would be very much appreciated as I will tend to have a much clearer understanding to move forward with my business.
Online credit card rates apply for orders placed on your online store. In person rates refer to brick and mortar sales. Sales going through Shopify Point of Sale that are conducted in person.
These rates do not differ on Shopify
If you process an order using a manual payment method - cash on delivery, bank deposit, cheque, making test orders or marking draft orders as paid/pending only, you will not be charged transaction fees. One exception to this is that orders placed through the India COD app are charged transaction fees.
If there is anything else I can help you with, please let me know.
Really appreciate on the prompt response. Just a further clarification on my questions asked previously.
If my 3rd Party Provider doesn’t have an on-site checkout option, would I still be charged on the Shopify charges mentioned.
My questions:
If I use a payment gateway that is NOT an on-site checkout, will I still incur the fees mentioned? If so, could you please specify (as attached).
Also, if it’s either a credit or debit card payment means I have to pay 4.9% + 30 cents as transaction fees? If I’m wrong, could you please detail the costs further.
Depending on the payment gateway it does depend on what you define as on-site vs offsite checkout. For example, when you use PayPal on Shopify, it opens up a separate window to login to their gateway and complete the order. But their app is actually integrated with Shopify so it sends all that order details back to the Shopify store automatically (creates the order in Shopify, order status changes to paid, details of the transaction are sent into the order timeline, etc). Because it’s integrated, you will be subject to the transaction fees because it’s still using the Shopify API to bridge the third-party gateway and the merchant’s store.
Now if your payment gateway is off-site and does not communicate with Shopify whatsoever, then it’s not even creating the order in Shopify. In this instance, you would not be subject to transaction fees because it does not communicate with the Shopify API at all. I would recommend getting in touch with the third-party provider for details of how their checkout system works with the Shopify platform. They will have the insight to let you know if their merchants who use their gateway are still paying the Shopify transaction fees or not.
Also just to clarify, the online and in-person credit card rates are only applicable when using Shopify payments. These do not come into effect with 3rd party gateways. So your fees would be 2% from Shopify + your third-party gateways fees. You mentioned they are going to be charging your 3.9%. So in your case, your total fees would be 3.9% + 2%.
What an absolute joke! An additional 2% vulture fee on top of the 3rd party gateway fee which is already 7-10%! Shopify should be ashamed of themselves charging this new fee introduced recently. Don’t try to justify it, It’s simply exploiting merchants!
