Stripe vs. Shopify Payments

Which Payment Processor Fits Your Business Model?

Introduction

When it comes to choosing the right payment processor for your business, Stripe and Shopify Payments are often top contenders. Both platforms offer seamless, secure, and reliable ways to accept payments online, but they each come with their own set of features, pricing structures, and benefits that could impact your bottom line. For business owners, selecting the best solution isn’t always a clear-cut decision.

In this comprehensive comparison, we’ll break down the features, pricing, pros, and cons of both Stripe and Shopify Payments. Whether you’re running an e-commerce store on Shopify or operating independently, understanding the differences between these two giants can make all the difference in streamlining your payment processes and maximizing your profitability.

By the end of this article, you’ll have a clear picture of which platform aligns better with your business needs, helping you make an informed choice for long-term success. Ready to dive in? Let’s explore how these two payment processors stack up against each other.

Section 1: Stripe Overview

What Is Stripe? 

Stripe is a comprehensive payment processing platform designed to handle both online and in-person transactions. It is renowned for its flexibility, making it a preferred choice for businesses of all sizes and industries. Stripe offers a robust suite of tools that cater to developers, enabling the creation of custom payment solutions, billing models, and even subscription services. It’s designed to integrate seamlessly with websites, mobile apps, and even physical stores, providing a high level of customization for businesses that need tailored solutions.

Who Uses Stripe?  

Stripe is perfect for businesses with unique or complex needs, particularly those that require advanced customization. It’s often favored by tech-savvy companies, developers, and businesses with a global reach, including startups, subscription-based services, and e-commerce giants. Companies that need advanced features, like recurring billing, multi-currency support, or integration with third-party platforms, turn to Stripe for its extensive capabilities and customization options. Additionally, its ability to support over 135 currencies makes it an excellent choice for businesses operating internationally.

Key Highlights: 

• Global Reach: Stripe supports over 135 currencies, enabling businesses to accept payments worldwide without worrying about currency conversion issues. 
• Customizable Checkout: Stripe allows businesses to create a branded, user-friendly checkout experience tailored to their specific needs, offering a smooth and consistent journey for customers. 
• Extensive API Integrations: With powerful API capabilities, Stripe integrates easily with a wide range of third-party tools, allowing businesses to create advanced payment workflows and automate processes. This makes it a go-to solution for developers and businesses that require flexibility and advanced features.

Section 2: Shopify Payments Overview

What Are Shopify Payments? 

Shopify Payments is the native payment gateway for Shopify users, integrated directly into the platform. Unlike third-party processors, Shopify Payments allows merchants to accept payments directly without the need for additional setup or third-party fees. It offers a streamlined and user-friendly experience for business owners who are already operating within Shopify’s ecosystem. By using Shopify Payments, merchants avoid the hassle of configuring separate accounts or dealing with the complexities of external payment processors.

Who Uses Shopify Payments? 

Shopify Payments is ideal for businesses that operate exclusively within the Shopify ecosystem. It is best suited for merchants who have an established Shopify store and want an easy-to-use, integrated solution. Shopify Payments removes the need for additional third-party payment gateways, making it a seamless choice for businesses that rely on Shopify’s e-commerce platform for day-to-day operations. It’s particularly beneficial for small to medium-sized businesses looking for a straightforward and cost-effective way to process payments.

Key Highlights: 

• Seamless Integration: Since Shopify Payments is built directly into the Shopify platform, it requires no third-party installation or configuration, providing an effortlessly smooth setup process. 
• No Additional Transaction Fees: Shopify Payments eliminates extra transaction fees that third-party processors usually charge, making it an attractive option for cost-conscious businesses. The only fees involved are the standard credit card processing rates. 
• Support for Popular Payment Methods: Shopify Payments supports widely-used payment methods, including Apple Pay, Google Pay, and major credit cards, providing customers with multiple payment options to enhance their shopping experience. This flexibility can increase conversion rates by accommodating various customer preferences.

Section 3: Stripe Features Overview

Key Features:

• Customizable Payment Solutions: Stripe offers a highly flexible and customizable payment system. Businesses can tailor the checkout process, payment flow, and integration with their websites or apps. Stripe allows for extensive customization, enabling businesses to create unique user experiences, from branding the checkout page to implementing complex payment processes.

• Advanced Subscription Billing Tools: Stripe shines when it comes to subscription-based billing. With features such as recurring billing, automated invoicing, and support for metered billing (where charges are based on usage), Stripe makes it easy for businesses offering subscription services to manage customers, payments, and billing cycles. Businesses can also implement complex pricing models and manage trial periods or discounts effortlessly.

• Fraud Protection with Machine Learning (Radar): One of Stripe’s standout features is its built-in fraud protection tool, Stripe Radar. Using advanced machine learning algorithms, Radar analyzes each transaction in real time to detect and block fraudulent activities. This proactive fraud detection helps businesses minimize the risk of chargebacks and maintain a secure payment environment for both customers and merchants.

• Global Payouts and Currency Support: Stripe enables businesses to accept payments in over 135 currencies, providing an easy way for companies to expand globally. Not only does it allow businesses to process payments from international customers, but it also supports global payouts, ensuring merchants can easily transfer funds across borders.

Strengths:

• Exceptional for Developers Needing Flexibility: Stripe stands out as a developer-centric platform. Its open APIs, robust documentation, and extensive integration options provide developers with the flexibility to create custom payment solutions tailored to specific business needs. Whether you’re building a subscription service, a marketplace, or a platform requiring complex payment structures, Stripe’s technical depth is a significant strength.

• Detailed Reporting and Analytics: Stripe offers comprehensive reporting tools and analytics that help businesses track sales, monitor trends, and optimize operations. From viewing transaction histories to generating financial reports, Stripe provides the insights needed to make data-driven decisions, making it especially useful for businesses that need detailed financial visibility.

Section 4: Shopify Features Overview

Key Features:

• Pre-Built Checkout for Shopify Stores: Shopify Payments comes with a pre-built, optimized checkout system designed specifically for Shopify stores. This ensures a smooth and seamless user experience, allowing customers to complete their purchases quickly and efficiently. With features like one-click checkout and integrated payment processing, Shopify Payments helps increase conversion rates and improve the shopping experience.

• Automatic Tax Calculations: Shopify Payments automatically calculates and applies taxes based on your location and the customer’s location, saving business owners time and effort. This feature ensures that businesses comply with tax regulations and simplifies the process of managing tax rates for international sales, making it ideal for businesses selling in multiple regions.

• Multi-Currency Support for International Customers: Shopify Payments supports multiple currencies, allowing businesses to cater to customers from different countries with ease. This feature provides automatic currency conversion at checkout, ensuring customers are charged in their local currency. For international businesses, this simplifies transactions and enhances the global shopping experience.

• Integration with Shopify POS for In-Person Sales: Shopify Payments integrates seamlessly with Shopify’s Point of Sale (POS) system, allowing businesses to accept payments both online and in person. This unified system helps streamline sales management, offering a single dashboard for online and offline transactions. Whether running a brick-and-mortar store or an e-commerce shop, Shopify Payments provides a complete solution for payment processing.

Strengths:

• Designed for Ease of Use with Shopify’s Ecosystem: Shopify Payments is optimized for the Shopify platform, making it an excellent choice for users who are already familiar with or operating within Shopify’s ecosystem. The integration is seamless, with minimal setup required, allowing business owners to focus more on growing their business than managing payment systems.

• Excellent for Businesses Seeking Simplicity: Shopify Payments is perfect for businesses looking for a straightforward, no-hassle payment solution. With automatic setup, integration, and a user-friendly interface, Shopify Payments minimizes the complexities often associated with third-party payment processors. It’s ideal for small to medium-sized businesses that prioritize ease of use and quick implementation over extensive customization.

Section 5: Stripe vs Shopify Payments: Pricing

Stripe Pricing 

When it comes to pricing, Stripe’s fees are transparent and straightforward, but additional charges can apply depending on your business’s needs. For online payments in the U.S., Stripe charges a standard transaction fee of 2.9% + $0.30 per successful card payment. This fee applies to all online transactions, regardless of the card type. If you’re processing international payments, Stripe charges an additional 1% fee for currency conversion and international cards. Businesses also need to be aware of fees for using specific payment methods, like ACH payments or wire transfers, which come with their own set of costs.

Stripe offers advanced features that can come with extra charges, including advanced reporting tools, fraud protection (Radar), and instant payouts. While Stripe is flexible and offers great value for developers and businesses with specific needs, those extra fees can add up if you’re leveraging multiple features.

Shopify Payments Pricing 

Shopify Payments’ pricing model is straightforward for Shopify store owners and designed to integrate directly with the Shopify platform. Transaction fees for using Shopify Payments are comparable to Stripe’s, starting at 2.9% + $0.30 per transaction for online payments, which mirrors Stripe’s fees for U.S. transactions. However, one major advantage of Shopify Payments is that there are no extra transaction fees beyond the card processing rates, unlike with third-party payment gateways where Shopify charges additional fees (usually around 2% per transaction). This can make Shopify Payments a more affordable option for businesses already within the Shopify ecosystem.

However, businesses that wish to use Shopify Payments must also have a Shopify subscription. Shopify’s subscription plans range from $39/month for the Basic plan to $399/month for the Advanced plan, depending on the features and level of support needed. These subscription costs are an essential factor to consider when comparing Shopify Payments to Stripe, especially for businesses on tight budgets or those just starting.

Key Takeaways:

Stripe has transparent fees but adds additional charges for certain payment methods and international payments.

Shopify Payments provides a streamlined pricing model with no additional transaction fees for Shopify users, but it requires a Shopify subscription.

For businesses already using Shopify, Shopify Payments can be the more cost-effective option, particularly as there are no extra charges for transaction processing.

Section 6: Stripe Pros and Cons

Pros:

• Highly Customizable: One of Stripe’s standout features is its ability to offer highly customizable payment solutions. Whether you need a simple checkout experience or complex billing cycles, Stripe can adapt to meet the needs of a variety of businesses. Developers can fine-tune every aspect of the payment process, making it an ideal choice for tech-focused businesses or startups with specific requirements.

• Supports a Wide Variety of Payment Methods and Currencies: Stripe supports a broad range of payment methods including credit and debit cards, ACH, digital wallets like Apple Pay and Google Pay, and even local payment methods like Alipay and WeChat Pay. Its support for over 135 currencies makes it an excellent choice for businesses aiming to expand globally and accept payments from customers across the world.

• Advanced Developer Tools: Stripe offers powerful APIs and developer tools, giving businesses full control over how payments are processed. The extensive documentation and flexibility allow developers to integrate Stripe seamlessly into their systems, create custom solutions, and build highly specialized payment flows. This makes Stripe a top choice for businesses that require advanced functionality or want to build unique payment features.

Cons:

• Can Be Complex for Non-Technical Users: While Stripe is highly customizable, its complexity can be overwhelming for business owners who aren’t familiar with coding or technical setups. Without the help of a developer, some businesses may find it challenging to take full advantage of the platform’s features. The user interface and setup process may not be as intuitive for non-technical users, which can result in a steeper learning curve.

• Additional Fees for Specific Features: While Stripe’s pricing is transparent, it’s important to be aware that additional fees can accumulate for certain services. For example, businesses might incur extra charges for things like advanced fraud protection (Radar), international payments, or instant payouts. These fees can increase the overall cost of using Stripe, especially for businesses that require multiple premium features.

Despite these drawbacks, Stripe remains one of the most powerful and flexible payment processors on the market, especially for businesses that need extensive customization and have the technical resources to implement its features.

Section 7: Payment Options to Consider for Your Business

Factors to Evaluate:

Transaction Volume: The volume of transactions your business processes will play a significant role in choosing the right payment processor. Businesses with a high transaction volume may benefit from platforms that offer lower transaction fees for larger volumes. Stripe, for example, offers competitive rates for high-volume businesses, while Shopify Payments may be more cost-effective for businesses operating within Shopify’s ecosystem.

• International Reach: If your business operates internationally or plans to expand globally, you’ll need a payment processor that can handle multiple currencies and international transactions. Stripe is an excellent option for global businesses, as it supports over 135 currencies and offers international payout options. Shopify Payments also supports multiple currencies, but it is best suited for businesses within the Shopify platform. PayPal, another popular option, allows for international payments and is widely accepted worldwide, making it a strong choice for businesses with a global customer base.

• Technical Expertise: Your business’s technical capabilities should influence your decision. Stripe is a great choice for businesses with in-house developers or the ability to hire technical experts, as it offers deep customization options and a wide range of developer tools. Shopify Payments, on the other hand, is designed for businesses looking for an easy-to-use, out-of-the-box solution, making it a more practical choice for business owners with limited technical skills. Other platforms like Square and PayPal offer user-friendly interfaces suitable for businesses without dedicated technical resources.

• Business Type (eCommerce vs. Brick-and-Mortar): Your business type also plays a critical role. For eCommerce businesses, Stripe offers more advanced features like recurring billing, subscription management, and extensive payment integrations. Shopify Payments is ideal for Shopify-powered eCommerce stores, providing a seamless experience with no additional transaction fees. For brick-and-mortar stores, Square offers an integrated point-of-sale (POS) system that syncs online and in-store sales, while PayPal can be a solid option for both eCommerce and in-person transactions with its mobile payments system.

Alternative Payment Options:

• PayPal: PayPal is one of the most widely used payment processors globally, offering simple and secure payment processing for online businesses. It’s easy to integrate, with support for various payment methods and currencies. PayPal is a great option for businesses looking for a quick and user-friendly solution, especially those with international customers.

• Square: Square is an excellent alternative for businesses that need a versatile payment system. It’s known for its easy-to-use POS system for physical stores and its ability to handle both in-person and online transactions. Square also offers low-cost, flat-rate pricing, making it ideal for small businesses with lower transaction volumes.

• Authorize.Net: This payment processor is ideal for businesses that require secure, reliable, and scalable payment solutions. Authorize.Net offers various features, including recurring billing, fraud prevention tools, and the ability to accept payments through multiple channels. It’s particularly well-suited for businesses with high transaction volumes or those that need advanced customization.

• Vantazo Payments: Vantazo Payments allows businesses to accept online payments directly through their invoicing platform. This option is particularly beneficial for freelancers and small businesses looking for an easy invoicing and payment solution. Vantazo integrates payment processing directly into its accounting platform, simplifying billing and payment management.

Conclusion

Choosing between Stripe and Shopify Payments ultimately depends on your business’s needs. Stripe is ideal for businesses requiring flexibility, customization, and global support, especially those with technical resources or complex payment workflows. On the other hand, Shopify Payments is perfect for businesses already within the Shopify ecosystem, providing a seamless and cost-effective payment solution without extra transaction fees.

Evaluate your business needs carefully – whether it’s flexibility, ease of integration, or global reach – and start using the best payment processing solution to scale your operations today. Take the next step toward efficient and secure payment processing!

Frequently Asked Questions (FAQs)

1. Can I use both Stripe and Shopify Payments? 

No, Shopify does not allow the use of both payment processors simultaneously. If you choose to use Shopify Payments as your payment gateway, you cannot also use Stripe. Shopify Payments is integrated directly into the Shopify platform, which restricts third-party payment processors. However, if you prefer Stripe’s features or pricing, you can disable Shopify Payments and use Stripe instead. The key takeaway here is that Shopify users must choose one payment processor at a time – either Shopify Payments or Stripe.

2. Which is cheaper: Stripe or Shopify Payments? 

Generally, Shopify Payments is more cost-effective for Shopify store owners. Shopify Payments does not charge additional transaction fees beyond the standard payment processing fee, which typically ranges from 2.9% + $0.30 per transaction. On the other hand, Stripe charges similar rates for card payments, but it adds additional fees for international transactions, currency conversion, and certain payment methods. Additionally, Shopify users who opt for third-party payment processors, including Stripe, will face an extra transaction fee (usually 2% per sale), making Shopify Payments the more economical choice for those operating within the Shopify ecosystem.

3. Is Stripe suitable for small businesses? 

Yes, Stripe can be a great choice for small businesses, especially those that need advanced features, scalability, and global reach. While Stripe is often associated with larger businesses due to its developer-focused tools, small businesses with plans for growth can also benefit from its comprehensive suite of features. For example, Stripe’s support for subscription billing, global currency handling, and customized payment flows makes it suitable for businesses with complex needs or those looking to scale internationally. That said, small business owners without technical resources may find Shopify Payments or other simpler options more manageable.

4. What happens if I don’t use Shopify Payments on my Shopify store? 

If you opt not to use Shopify Payments and instead choose a third-party payment processor (like Stripe, PayPal, or another provider), Shopify will charge an additional fee for each transaction. This fee ranges from 0.5% to 2% per transaction, depending on your Shopify plan. This means that, while you can use an external processor, it will come with extra costs. Shopify Payments is designed to offer a seamless, cost-effective solution for users within the Shopify ecosystem, and avoiding this feature could lead to higher transaction fees.

5. Can I switch between Stripe and Shopify Payments later? 

Yes, it is possible to switch between Stripe and Shopify Payments later, but there are some important considerations. If you’re using Shopify Payments and decide to switch to Stripe, you will need to disable Shopify Payments first. Similarly, if you want to switch from Stripe to Shopify Payments, you will need to make the change through your Shopify account settings. Keep in mind that switching may impact your existing payment processing, and it’s a good idea to review your current fees and integration requirements before making the transition. Additionally, if you’re running a live store, be sure to test the new payment gateway thoroughly to avoid any disruptions in your checkout process.

6. Does Stripe support all payment methods? 

Stripe supports a wide variety of payment methods, including credit and debit cards, Apple Pay, Google Pay, ACH transfers, Alipay, WeChat Pay, and more. It also supports local payment methods for specific regions, making it an excellent choice for businesses looking to cater to international customers. Whether your customers prefer credit cards, digital wallets, or bank transfers, Stripe provides a versatile and comprehensive payment processing system. However, depending on your region and chosen payment method, additional fees may apply.

7. How long does it take to set up Stripe or Shopify Payments? 

Setting up Stripe typically takes a few hours, as long as you have the necessary business details, including your bank account information and tax identification number. For Shopify Payments, the process is even simpler, especially if you’re already on a Shopify plan. Shopify Payments is pre-integrated into the Shopify platform, meaning you can begin accepting payments almost immediately after entering your business and bank details. While both platforms are quick to set up, businesses that require complex customizations or integrations may take longer to fully implement and test their systems.

8. Which platform has better customer support: Stripe or Shopify Payments? 

Both Stripe and Shopify Payments offer strong customer support, but the quality of support depends on your needs. Shopify Payments has dedicated support available via the Shopify platform, including phone, live chat, and email support, which is ideal for users already using Shopify for their store management. Stripe, being a more developer-oriented platform, offers 24/7 support through email and chat, but users with specific technical queries may benefit from its extensive documentation and developer community. Depending on your level of technical expertise, you may find one provider’s support to be more in line with your needs.