eCommerce Website Design - Credit Card Payment Processing Costs
eCommerce Website Design Tips
NZ Shopping Cart Guide | Credit Card Payment Processing
Shopify Payments vs Stripe vs Paypal
In order to process credit cards your ecommerce store must have both a credit card merchant facility (how the bank takes payments for you) and payment gateway (how your shopping cart talks to the bank). As your business grows these combined fees can add up to significantly more than the monly fee from your e-commerce platform.
This guide explains your options for choosing a credit card processing facility and compares the fees so you can choose a shopping cart that has all the features you need and you minimise your monthly costs. All fees and estimates on this page are in NZ dollars.
Shopify Payments
Shopify Payments (based on Stripe) is Shopify's built in credit card payment processing facility and we highly recommend it if you don't have an existing credit card merchant account (for your retail store). It's a breeze to set up and it eliminates payment gateway fees from both the shopping cart and the payment gateway provider. Shopify Payments is both a payment gateway and a credit card merchant facility. Only available with Shopify.
On Basic Shopify plan: New Zealand cards: 2.7% + 30¢ | International/Amex: 3.5% + 30¢
On Shopify plan: New Zealand cards: 2.5% + 30¢ | International/Amex: 3.4% + 3
On Advanced Shopify plan: New Zealand cards: 2.4% + 30¢ | International/Amex: 3.3% + 30¢
High volume plans are also available.
Note: if you use Shopify with a 3rd party payment gateway such as Paystation you will incur extra fees (not shown here). It's usually better to use Shopify Payments and avoid the extra fee.
Stripe
Stripe changed the game by introducing low transaction fees, no monthly fee and 30 minute set up of your credit card merchant facility, including all the verification steps which we've seen take 8 months with a bank. Stripe is both a payment gateway and a credit card merchant facility. All you need to add is a shopping cart.
Stripe fee: 2.9% + 30¢ per transaction
Manual Credit Card Processing with Stripe
Stripe has some nice options for processing phone/manual orders and your choice depends on whether you prefer to use mobile or desktop, if you want PayWave or if you want to manually process payments through your shopping cart so payments are attached to orders.
Manually via Stripe Dashboard
From the stripe dashboard you can create a payment and enter the card details. Works well on desktop but quite clunky on a phone. Note that you can not create payments using the stripe mobile app. Stripe does not allow this to be your primary payment option and say it should only be used under exceptional circumstances.
PayNow Mobile App
Allows manual payments from your phone or tap a credit card on the back of the (NFC capable) phone to charge it. The fee: is 0.5% per transaction.
https://paynow-app.com/
Manual Payments Attached To Shopping Cart Orders
Some shopping carts allow you to create an order from the admin screen and process a payment from there. You may need a plugin for this, for example WooCommerce has the Phone Orders Manual Orders plugin by Ignitewoo for US$99 per year.
You can see more mobile apps for stripe here.
Paypal
Paypal is the original (relatively) fast set up, low transaction fee, and no monthly fee payment option. The downsides with Paypal are that Paypal may take fees when sending your money to you and your website's checkout process requires more steps because payment is made through the Paypal website, which can confuse customers and impact your sales. The plus side of Paypal is that some people prefer to pay with Paypal so even if it's not your main credit card processing facility, it can be a good idea to include it.
Paypal fee: 3.4% + 45¢ per transaction
Manual Credit Card Processing with Paypal
Paypal's options for processing card present or manual (phoned in) payments and hardware for using your phone to proccess credit card are not available in New Zealand at the time or writing.
Manual Credit Card Payments & PCI Compliance
If your business never sees your customers credit card details (because your customer uses your online checkout and payment gateway) then your payment processing service is fully responsible for PCI compliance.
If you plan to manually process credit card orders, for example a customer calls in and gives you their credit card number over the phone, then you need to be aware that you are taking on responsibility for being PCI compliant and this is not to be taken lightly. Becoming PCI compliant is an expensive and time consuming process that is probably not viable for a small business. If all you ever plan to do is take a customers credit card number over the phone and type it into your payments system as they read it to you then you may be ok. If you write down the credit card number on a piece of paper then you may have a PCI compliance problem.
If in doubt it's best to call your payment processor for advice. We've found Stripe to be very helpful with these sorts of questions.
Fee Comparison
The tables below show both estimated monthly fees and set up fees for Shopify Payments vs Stripe vs Paypal. Number of transactiopns is estimated based on a $40 average sale.
Because there are so many payment gateway options available, gateway fees are rough estimates but they are realistic and applied consistently.
| Gateway set up fee | |||
| Merchant account set up fee | |||
| Monthly Turnover | Transactions ($40 avg ale) |
Annual Turnover | |
| $500 | 13 | $6,000 | |
| $1,000 | 25 | $12,000 | |
| $2,000 | 50 | $24,000 | |
| $3,000 | 75 | $36,000 | |
| $4,000 | 100 | $48,000 | |
| $6,000 | 150 | $72,000 | |
| $8,000 | 200 | $96,000 | |
| $10,000 | 250 | $120,000 | |
| $20,000 | 500 | $240,000 | |
| $50,000 | 1250 | $600,000 | |
| $83,333 | 2083 | $1,000,000 |
|
Shopify Payments
|
|||
| $0 | |||
| Merchant account set up fee | $0 | ||
| Monthly Turnover | NZ Cards |
Overseas Cards / Amex |
|
| $500 | $17 |
$21 |
|
| $1,000 | $34 |
$42 |
|
| $2,000 | $69 |
$85 |
|
| $3,000 | $103 |
$127 |
|
| $4,000 | $130 |
$166 |
|
| $6,000 | $195 |
$249 |
|
| $8,000 | $260 |
$332 |
|
| $10,000 | $315 |
$405 |
|
| $20,000 | $630 |
$810 |
|
| $50,000 | $1,575 |
$2,025 |
|
| $83,333 | $2,625 |
$3,375 |
|
|
Stripe*
|
||
| Gateway set up fee | $0 | |
| Merchant account set up fee | $0 | |
| Monthly Turnover | Fee | |
| $500 | $18 | |
| $1,000 | $37 | |
| $2,000 | $73 | |
| $3,000 | $110 | |
| $4,000 | $146 | |
| $6,000 | $219 | |
| $8,000 | $292 | |
| $10,000 | $365 | |
| $20,000 | $730 | |
| $50,000 | $1,825 | |
| $83,333 | $3,042 |
|
Paypal
|
|
| Gateway set up fee | $0 |
| Merchant account set up fee | $0 |
| Monthly Turnover | Fee |
| $500 | $23 |
| $1,000 | $45 |
| $2,000 | $91 |
| $3,000 | $136 |
| $4,000 | $181 |
| $6,000 | $272 |
| $8,000 | $362 |
| $10,000 | $453 |
| $20,000 | $905 |
| $50,000 | $2,263 |
| $83,333 | $3,771 |
* Stripe is not available for BigCommerce in New Zealand yet.
As you can see, once your turnover reaches a certain level it becomes all about the payment gateway and credit card commission fees so this is the bit you need to shop around for the most.
See Also:
Questions? Now would be a good time to contact us and have a chat about your ecommerce requirements.