How does Shopify pay me? Understanding Shopify payments, payouts and fees
Kaci Carson
November 03, 2023
Understanding when you receive your Shopify payouts from and any applicable fees is an important part of managing your e-commerce business finances. Shopify Payments handles payouts to all Shopify merchants. Shopify Payments provides a consistent process for sellers to receive earnings quickly and manage cash flow.
This article will cover the timeline of Shopify merchant payouts, different payout methods, associated fees to be aware of, and tips for reconciling payments. Whether you’ve just started selling on Shopify or are looking at ways to optimize an established business, having clarity around how Shopify payouts work is invaluable.
What is the Shopify payout timeline?
Shopify uses a daily payout schedule to send earnings to merchants. Payouts are initiated each business day for transactions from the previous day. Funds are first available via direct deposit to your Shopify Balance, with a daily 10am ET deposit. Direct deposits to connected bank accounts follow a 2-3 day delay after processing through the banking system.
This would mean, Monday’s transactions would deposit to Shopify Balance on Tuesday morning, then bank accounts by Thursday. Weekend and holiday sales accumulate for the next payout. Understanding this flow of funds to Shopify Balance first, then bank accounts shortly after, helps you to manage cash flow effectively.
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Shopify payouts for international operations
If you’re a seller operating internationally there are several advantages to using Shopify Payments. With Shopify Payments, you’re able to have access to currency conversion features. This allows the price of your products to be converted to customers’ local currency, which can have a positive impact on your sales conversions in other countries.
Another benefit to sellers operating internationally is the access to settings that allows you to set payment methods specific to your customers locations. This means that customers can pay using the methods and payment options most familiar to them which also can have a direct impact on conversions. These important features have value to all Shopify sellers who currently or in the future plan to sell internationally.
How does Shopify pay you with Shopify Payments?
Shopify offers several payout methods so merchants can access earnings in the way that fits their business. The primary option is direct deposit to your bank account, initiated 2-3 days after the transaction is processed through Shopify Payments. For instant access, daily payouts first go to your Shopify Balance, where funds are available immediately. Shopify Balance can also be used to spend or transfer funds.
With Shopify Balance, you’re able to access a digital card that works just like a debit card to make payments and ATM withdrawals. You can adjust payout methods at any time in your Shopify Payments settings. Choosing the right approach depends on cash flow needs – direct deposit provides funds directly in your bank, while Shopify Balance enables real-time spending and transfers.
It’s important to regularly check your Shopify Balance to check payments received. Here are some simple steps to follow to access your balance:
- First, go to Finances then click on Balance.
- Next click on Account then click Manage account, to access your Shopify settings.
- Lastly click on Show details to access your balance details.
Shopify payment fees
When reconciling your Shopify payouts, be aware of certain fees that may apply to you. For accounts that aren’t set up with Shopify Payments, transaction fees do apply. For currency conversion of your payout, Shopify will charge a fee of 1.5% in the US, the fee is 2% for all other countries. It’s also important to note that international payout incur a fee based on your Shopify plan.
For Shopify Plus users, the fee is set at 1.25%. For all other plans, the fee is set at 1.5%. Sellers using Shopify payments, Shop Pay, and PayPal express, are not subject to Shopify transaction fees. To make sure you’re eligible for Shopify Payments, you need to ensure your bank account meets necessary requirements by country that you aren’t subject to unexpected fees.
Shopify Payments also provides reporting so you can closely track fees, which may vary based on your business needs. Monitoring fees will help accurately forecast your total net payouts helping you stay on top of your revenue and overall business income.
Optimizing for faster payouts
There are a few ways Shopify merchants can optimize their configuration to accelerate payouts. First, be sure to input and confirm your bank account information so you can enable direct deposit of earnings as it prevents delays waiting for mailed checks.
There are a few ways Shopify merchants can optimize their configuration to accelerate payouts. First, be sure to input and confirm your bank account information so you can enable direct deposit of earnings as it prevents delays waiting for mailed checks.
You can also take advantage of instant transfers to Shopify Balance. Maintaining an active Shopify Balance allows you to immediately access earnings for spending or withdrawals as soon as the daily deposit hits.
Checking your payout settings frequently ensures you are leveraging the fastest options. By optimizing your Shopify set up and having an increased knowledge of payouts, you’ll be able to ensure smoother operations going forward.
Reconciliation and statements
To stay organized with payouts, merchants should develop a reconciliation process using Shopify tools. Through using Amaka’s accounting integration you’re able to exchange the usual lengthy process of reconciliation for an automated process. Reconciliation would usually involve manually looking through statements to identify mistakes but with Amaka these transactions get matched automatically once it’s been connected to your accounting software.
To begin setting up automatic reconciliation you first need to establish a connection between your online banking account and either Xero, QuickBooks Online or MYOB using bank feeds. This setup enables automatic synchronization of your bank transactions with your accounting software, while also providing flexibility to import historical transactions.
Then, Amaka’s Shopify integration will automatically sync transactions from Shopify into your accounting software. This data is then matched with your banking data to ensure there have been no discrepancies. Here’s how quick the reconciliation process becomes with Amaka:
- For Xero users, accessing the Reconcile tab in Xero is all that’s required. Here, you can review and confirm the accuracy of the matched transactions before clicking the OK button.
- QuickBooks Online users can navigate to Accounting and select the Reconcile option, where you can confirm matches by clicking the Match button.
- MYOB users first will need to locate the Banking tab then find the Bank transactions. Next, you’ll need to click on transactions that appear as ‘Possible match found’ followed by clicking Save to complete the reconciliation.
It’s important to reconcile regularly, such as on a monthly basis to ensure accuracy in your business finances. With the integration in place, you’ll be able to free up time and ensure you are not making errors in your transactions.
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Key takeaways on Shopify payouts and fees
Understanding how Shopify pays you is a key aspect of effectively managing a Shopify business. Taking a proactive approach to comprehending Shopify payments empowers your business to operate seamlessly. With clarity on the payout process, timelines, deductions, and tools, merchants can optimize their configuration, cash flow, and financial tracking.