If you’re a store owner using Shopify to power your store, it is very important to know how Shopify process payments. To ensure you're getting all your payments without any issues, you have to make sure you understand how payment processing works. Shopify supports various payment methods. You can pay using credit cards, make physical payments or you can use payment gateways like Paypal, Shopify Payments, etc. Shopify does not process your payments first-hand. Instead, Shopify process payments through various third-party providers.
How Shopify process payments
When setting up your account, you choose the various payment providers and methods you’ll be employing to handle your payments. When a customer makes an order, Shopify process each payment, using the selected methods. Therefore, there is always a delay between when the customer makes a payment and when you receive the payment. When the processing is over, Shopify transfers the money to your merchant account. In contrast to the other payment methods, payment gateways like Paypal and Stripe use their own methods to transfer the funds to your account.
As a store owner, you pay a small transaction fee for every payment processed. However, it is important to note that Shopify Payment users don't have to pay this. The transaction fee for all payments made through Shopify is waived.
Chargebacks and Inquiries
Shopify also helps you deal with chargebacks and inquiries from your customers. Whenever a customer files a chargeback or inquiry with their bank, the customer’s bank contacts you asking for evidence. The bank takes money from you if it is a chargeback. However, if it's an inquiry, the bank doesn't take money from your account. You have to present evidence about the transaction, and Shopify helps you with this. After presenting the evidence, the bank takes around 2-4 months to review the case and then it resolves the case accordingly. Additionally, when the bank sends you a chargeback, an additional chargeback fee(amount varies based on country) is also taken from your account. If the chargeback goes in your favor, the bank will refund you the original amount. Shopify will refund the chargeback fee.