Shopify Payment Gateways & Merchant Accounts

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Libby James
Merchant Services Expert

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

Shopify explained

Shopify is primarily a website platform which offers Shopify Payments Gateways and Merchant Accounts on the back end of the site structure and web hosting – enabling retail businesses to experience an end-to-end e-commerce solution all under one Shopify shaped umbrella, not just here in the UK but internationally.

With Shopify’s main client base being retail merchants, they then launched a POS (point of sale system) for customer facing businesses, also growing a presence in the hospitality markets. The Shopify EPOS has become a popular low-cost option for start-up businesses and SMEs.

To understand this in a little more depth, prior to processing customer payments it’s important to know how payment gateways work and the purpose of securing an efficient payment gateway for your e-commerce store.

Payment Processors for Shopify

Whether it be via Shopify or alternative website platforms, to process payments online businesses require both a payment gateway and a merchant account. Shopify sites work with the Shopify payment gateway alone, which then integrates to Shopify approved merchant accounts.

The Shopify payment gateways are the part of the process that encrypts customer card details, meaning the transaction remains secure. The gateway then communicates with the merchant account provider to ensure funds are available to complete the sale. After an agreed period, ordinarily a few workings days, those funds are then settled to the business.

What are the benefits of a Shopify payment gateway

Shopify offer its clients lots of benefits, some of which include;

  • 14 day free trail
  • 24/7 customer support
  • Advice on running your ecommerce business through the Shopify Blog
  • Various sales channels and enterprise plans

Do you need a merchant account for Shopify?

We often get asked ‘is Shopify a merchant account?’ and if so ‘what are Shopify merchant account fees?’  As mentioned before Shopify offer a merchant account and payment gateway facility – however you do not have to use the Shopify to process payments.

When using Shopify, you can  set up your own or a third-party payment processor remember the merchant account will have to integrate to the Shopify platform in order to process payments effectively. This in turn narrows down the merchant account providers to choose from.

Each merchant account pricing structure varies, therefore we suggest carrying out a comparison on a pound for pound basis to establish if it’s worthwhile keeping all payment processor elements with Shopify.

What are the best payment gateways for Shopify?

While selling goods online it’s crucial to ensure you have the lowest overheads when taking card payments, which is why Shopify appeals to a large number of UK merchants. When businesses grow or change the services and products they supply, Shopify then can become obsolete.

It’s in moments like this that business owners consider moving away from Shopify, finding alternatives. This can be a full platform and website redesign, or companies can choose to keep the Shopify platform and search for the best third party payment providers working with Shopify.

It’s important to remember that every business is unique and that the way you accept card payments can change throughout the lifetime of your business.

At Merchant Advice Service we help you source the best possible payment gateway whether you choose to stick with Shopify or start a fresh elsewhere. We do so with a variety of partners, brokers and banks, meaning we not only look at rates but also help you to find the right technical solution to suit your business needs now and in the future. Give us a call or fill out our enquiry form.


Payment gateways for Shopify

The Shopify gateway works well for smaller retail businesses who in the world of card payments are seen as lower risk. However, like any gateway and merchant account provider Shopify merchant card processor accounts have specific criteria and therefore businesses which will and won’t be accepted upon application.

Before building your site, it’s worthwhile establishing if you meet payment processing criteria with Shopify – this will also ensure you reduce the risk of being terminated/declined after the site is live.

If you believe that your company may be deemed high-risk by Shopify there are alternative solutions available.


Shopify 3rd party payment gateway

The Shopify platform has limited options when it comes to integrated merchant accounts and gateways, meaning that some larger businesses or high-risk companies no longer find Shopify payment services suitable to changing needs. This can be for multiple reasons such as increased costings, change in Shopify risk appetite or wanting functions that are not currently available on Shopify such as pay by link.


This is normally when businesses started to look for alternative payment processors for Shopify sites. Let’s look at the reasons a company may wish to use alternatives to the Shopify Payment Gateway.

Shopify and high-risk businesses

As a rule of thumb, Shopify stores do not support high risk merchant accounts applications. Therefore if you are operating in industries such as Vape, CBD, Travel, Gaming/Gambling or High Ticket Sales a Shopify store alone will not be suitable. Although building the site will be straight forward, finding a supporting high risk merchant account on the backend will prove problematic.

Understanding what is deemed as high-risk in the card payments world can be confusing. First of all, it’s really important to understand that each and every payment processor have different criteria – so if one deems you as higher risk, it doesn’t mean all will. Sadly, for this very reason, understanding if you fall into the high-risk bracket can seem like a bit of a mine field. An example of high-risk industries that some acquiring banks have conflicted views on is kitchen and bathroom firms, Some providers deem them to be high-risk due to the lead time from customer order to delivery, whereas others do not have a problem with onboarding such business.

As well as industry type, acquiring banks and gateway providers will use industry reputation and history to review whether they want to work with the business. This can include anything from chargeback levels to historic fraud risk within similar businesses. For example, a lot of banks and payment gateways do not like working with tech support firms, especially if located offshore.

Another common reason businesses are deemed high-risk, is due to the location of Directors or company registration. A lot of banks here in the UK and EU can only work alongside businesses registered in the same locations, this is due to licensing regulations. Acquiring banks will also take into account, the local laws surrounding industry type, for instance some products are legal in one state in America but illegal in others.


If you are unsure whether your business is deemed high-risk or not, we suggest using an unbiased merchant services broker who is experienced in high-risk markets. A good broker should be able to help your business to understand how it will be viewed from a risk point of view by the banks and gateways. They will also be able to help you package your application correctly, therefore increasing the likelihood of being accepted by the most appropriate provider the first time around.


What costs to expect with Shopify high-risk payment processing

Once you’ve found a suitable gateway provider which works with your Shopify site, there are a few things to be made aware of. Quite often with high-risk industries the bank and gateway increase costings, in a nutshell this makes the risk commercially viable! Shopify is no exception, and will also charge you a fee for using a third party.


The second thing to take into account is that the majority of banks will request that a rolling reserve is put on the account – details of which will be discussed when terms are offered by the bank.


High risk merchant account – Shopify explained

Once you’ve established the risk involved with your industry type, finding the best payment gateway for Shopify can be difficult, especially if you’re classed as a high-risk business. The reason being that integrated Shopify merchant services providers do not accept high-risk companies because they fall outside of the risk appetite. This leaves high-risk businesses searching for a payment gateway for their Shopify site, which can feel like an impossible task as there are limited solutions available.


High-risk companies will need to find a gateway provider which not only integrates with the Shopify site but also has connected merchant accounts who have processed payments for similar businesses – so therefore have the highest chance of having an application approved. Shopify charge a fee for working alongside other gateway providers so it’s important to take this into account when working out costings.

Shopify alternatives to limit chargebacks

Chargebacks can be a headache for any online business, Shopify sites are no exemption. Some fintech gateway providers can work alongside the Shopify platform while limiting a requested rolling reserve and managing chargebacks. This is often a reason that merchants choose to move away from the Shopify payment solution, adding service benefit to their payment processing rather than cutting payments costs alone.

Best third party payment providers – Shopify – high ticket items

The second most common reason businesses search for an alternative Shopify merchant account, is that their customer volumes have increased and therefore the Shopify merchant account fees are no longer economical. In this instance merchants can often save on Shopify costs by using a Shopify approved gateway with an alternative merchant account. This is also advisable if turnover is high on a monthly basis as the business can use multi-merchant accounts via the same gateway.


As always, we advise comparing over all costs on a pound for pound basis. Shopify will charge a percentage cost for using a competitor payment gateway so it’s important to understand the overall implications of that. Depending on your reason for needing an alternative, it’s advisable to consider all options.

Merchant Advice Service – how we work

Merchant Advice Service provides non-biased free of charge advice, we work with a team of experts to do so. Our aim is to arm you with the tools required to make informed decisions when it comes to your business card payments and business banking needs. To discuss your Shopify site and how we can help you, speak to our experts today.

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Libby James

Libby James Co-founded Merchant Advice Service alongside David Bird in 2016. Her finance background, coupled with retail and customer service experience, gave Libby the drive to bring transparency and non-biased advice to the world of merchant services. Having come from the heavily regulated mortgage and insurance industry, Libby found it puzzling that other financial sectors lacked regulation and transparency leaving customers confused and unable to make informed decisions when it came to accepting card payments. This was soon to become Libby’s obsession!

With the help of some of the industry’s best, Libby began to research acquiring banks, complex terminology/regulation, and the problems customers experience within merchant services and payment gateway markets. She spent years on sourcing solutions for complex clients, which previously others were unable to assist with. Libby established relationships with brokers and banks which would soon form the cornerstone of Merchant Advice Service. As a result Libby has been featured in high-profile publications across the web.

Libby is proud to be the entrepreneur’s champion, supporting start-up businesses regularly. Her industry insights can often be found on LinkedIn where she provides free of charge advice and money saving pointers. It’s safe to say she has her finger on the pulse of everything card payments related.

Libby speaks of her experience in founding and running Merchant Advice Service…

‘Merchant Advice Service is one of my greatest achievements to date. We help business owners to overcome card processing issues which can become detrimental to their business. We assist SME’s in finding suitable card payments solutions, helping them create their vision. Each and every day is different, exciting and fore filling. As technology advances I can’t wait to see the way in which the merchant services market advances, and I’m pleased that our business will play a part in educating company owners along the way.’

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