Is Shopify Payments the Same as Stripe? A Comprehensive Guide

Table of Contents

1. Introduction
2. Understanding Payment Processors
3. Overview of Shopify Payments
4. Overview of Stripe
5. Comparing Features: Shopify Payments vs. Stripe
6. Which One Should You Choose?
7. Leveraging Tevello for Your Online Course Success
8. FAQ

Introduction

Did you know that the global e-commerce market is expected to reach a staggering $6.3 trillion by 2025? With such significant growth, the question of how to effectively handle online transactions has never been more pertinent for entrepreneurs and merchants alike. As online businesses shift towards diversified revenue streams and move away from traditional brick-and-mortar models, it becomes crucial to understand the best tools available.

As Shopify merchants explore payment solutions, we often encounter a pertinent question: Is Shopify Payments the same as Stripe? While both payment processing services play critical roles in online transactions, they serve different purposes and offer distinct features. This blog post aims to elucidate the nuances between Shopify Payments—Shopify’s own integrated payment processor—and Stripe, a standalone payment service known for its extensive customization options.

Here at Tevello, we are committed to empowering Shopify merchants to unlock new revenue streams through innovative solutions that provide a seamless experience. Our focus on integrating powerful features into the Shopify ecosystem allows merchants to manage their online courses, communities, and more without juggling multiple platforms. In this post, we will dive deep into the various aspects of payment processing, helping you make an informed choice between Shopify Payments and Stripe.

We invite you to reflect on your current business goals: Are you launching a new Shopify store? Do you seek to enhance the customer experience with reliable payment processing? Understanding the differences between Shopify Payments and Stripe can enhance your overall strategy for success.

Understanding Payment Processors

Before we delve into the specifics of Shopify Payments and Stripe, let’s clarify what payment processors do. A payment processor is a service that authorizes credit card or direct payments for online retailers or e-commerce platforms. It acts as a mediator between the buyer and seller, ensuring the secure transfer of funds while maintaining critical business operations like fraud prevention and customer management.

Let’s explore how Shopify Payments and Stripe fit into this essential role for online businesses.

Overview of Shopify Payments

Shopify Payments is Shopify’s integrated payment processor that allows merchants using the Shopify platform to accept various forms of payment through a simple and streamlined interface. By incorporating Shopify Payments, merchants can leverage:

• Easy Setup: Activating Shopify Payments is straightforward, requiring minimal steps for existing Shopify users.
• Seamless Integration: As it’s built into the Shopify ecosystem, there’s no need for third-party integrations or external accounts.
• Reduced Transaction Fees: Using Shopify Payments allows merchants to avoid additional transaction fees associated with external payment processors.
• Localized Payment Methods: Shopify Payments supports multiple currencies and local payment methods depending on the merchant's geographic location.

Shopify Payments is designed primarily for online stores, making it highly accessible for Shopify merchants. Whether you're selling digital products, physical goods, or offering courses, Shopify Payments adapts to meet your needs efficiently.

Overview of Stripe

Stripe, on the other hand, provides a powerful payment processing platform designed for businesses looking for maximum customization. Key features of Stripe include:

• Robust APIs: Your flexibility in designing payment integration can be greatly enhanced with Stripe’s comprehensive set of APIs, allowing for tailored payment solutions based on business needs.
• Multi-Currency Support: Stripe supports payments in various currencies, making it suitable for businesses looking to expand internationally.
• Advanced Fraud Protection: Stripe’s machine learning-based tools help identify and prevent fraudulent transactions.
• Wide Application Integration: Stripe can be integrated into various platforms and applications, making it an option for businesses that operate outside of Shopify.

While Stripe offers a more technical solution, it provides greater flexibility and customization, serving a variety of different business types—including those not hosted on Shopify.

Comparing Features: Shopify Payments vs. Stripe

When deciding between Shopify Payments and Stripe, understanding the key features and evaluating how they align with your business needs is vital. Let's conduct a detailed comparison of these two payment processors:

1. Integration and Ease of Use

Shopify Payments:

• Integrated by default into the Shopify ecosystem, making setup quick and straightforward.
• Ideal for merchants who prioritize simplicity and immediate access to payment processing features.

Stripe:

• Integration requires technical expertise, as it is geared towards developers needing customization.
• Offers great flexibility for businesses with specific needs or that operate through various platforms.

2. Pricing and Transaction Fees

Shopify Payments:

• No additional monthly fee is required to use Shopify Payments; instead, you pay transaction fees based on your Shopify plan:
  • Basic Shopify: 2.9% + $0.30 per online transaction
  • Advanced Shopify: 2.4% + $0.30 per transaction
• Because it’s built into the Shopify subscription, using Shopify Payments eliminates extra transaction fees for third-party processors.

Stripe:

• Charges a standard fee of 2.9% + $0.30 for online transactions. Specific fees apply for international transactions, currency conversion, and other services.
• Does not require a monthly subscription, making it flexible for dynamic business needs.

3. Payout Speed

Shopify Payments:

• Funds are typically processed and available in your account within 2 business days for Shopify Payments.
• Payout schedules can be adjusted based on your preferences.

Stripe:

• Stripe also offers fast payout speeds, usually within 2 business days after the initial review period.
• Merchants can opt for customized payout schedules but may experience delays for accounts determined to be high-risk.

4. Fraud Protection

Shopify Payments:

• Basic fraud protection tools are embedded, such as CVV and address verification.
• More robust options may require third-party apps from the Shopify App Store.

Stripe:

• Offers advanced fraud detection tools like Stripe Radar that use machine learning to adapt to fraudulent patterns.
• Customizable fraud detection rules allow users to have control over transaction parameters, ensuring greater protection.

5. Global Reach and Supported Currencies

Shopify Payments:

• Currently available in 17 countries and limited to the Shopify eCommerce platform.
• Users may choose various local payment methods supported in their regions.

Stripe:

• Supports payments in over 135 currencies and operates in 37 countries, expanding opportunities for global transactions.
• Perfect for businesses aiming to cater to an international customer base.

Which One Should You Choose?

So, is Shopify Payments the same as Stripe? The answer is both yes and no—they serve the same fundamental purpose as payment processors, but they target different user needs and offer distinct advantages. Here’s a high-level summary to help you choose:

• Choose Shopify Payments if:
  • You are already using Shopify as your e-commerce platform.
  • You want an integrated solution for a smooth setup and management experience.
  • You prefer to avoid additional transaction fees.
• Choose Stripe if:
  • You are not strictly using Shopify or need a highly customizable payment solution.
  • Your business model involves complex payment requirements or services beyond standard e-commerce transactions.
  • You value more extensive support for international payments and currencies.

As we build our businesses, the importance of choosing the right payment processor cannot be overstated. Both Shopify Payments and Stripe offer efficient solutions for different business needs, thereby allowing us to execute our e-commerce plans effectively.

Leveraging Tevello for Your Online Course Success

At Tevello, we believe in not just facilitating transactions but enhancing the overall experience for Shopify merchants. Our all-in-one solution allows you to create and manage online courses and products seamlessly alongside Shopify Payments or Stripe, giving you the perfect platform to build vibrant communities while you focus on what you do best.

Ready to build your course? Get started with Tevello and start your 14-day free trial today! Start your free trial here. Explore our powerful feature set for course creation and community building here.

FAQ

1. Is Shopify Payments automatically available for every Shopify plan?

Yes, Shopify Payments is automatically available for all Shopify plans, but you may incur transaction fees based on your plan level.

2. Can you use Stripe with a Shopify store?

Yes, you can use Stripe as a third-party payment processor on a Shopify store. However, this may incur additional transaction fees as specified by Shopify.

3. What types of businesses benefit more from Shopify Payments?

Small to medium-sized businesses, especially those who only need to sell online and operate solely within the Shopify ecosystem.

4. What types of businesses benefit more from Stripe?

Businesses that require advanced customization, integration capabilities, or have diverse operational environments.

5. Can I switch between Shopify Payments and Stripe?

Yes, you can switch between different payment processing solutions depending on your business needs. However, making changes might affect your transaction history and other operational settings.

In conclusion, we understand that both Shopify Payments and Stripe play vital roles in facilitating secure transactions within the e-commerce space. Each has its unique strengths and is tailored to accommodate different business models. Whatever your choice may be, remember to consider how it fits into your broader business strategy and how it aligns with your goals.

For a seamless experience in managing not just payments, but also building an educational platform that generates new income streams, install the Tevello app and start your free trial today! Install the all-in-one course platform for Shopify.