Top 5 Shopify Payment Gateways for CPG Brands

Choosing the right payment gateway is critical for CPG brands on Shopify. A poor payment experience can lead to cart abandonment – 11% of shoppers leave if their preferred payment method isn’t available, and 86% stop shopping after one bad experience. Here’s a quick rundown of the top 5 payment gateways:

• Shopify Payments: Best for U.S.-based merchants selling physical products with seamless Shopify integration.
• PayPal: Ideal for global sales, offering trusted and secure payments in over 200 countries.
• Stripe: Perfect for subscription-based or recurring payments with advanced fraud protection.
• Authorize.Net: Great for high-risk businesses needing robust security.
• Amazon Pay: Simplifies checkout and builds trust with Amazon’s reputation.

Quick Comparison

Each gateway offers unique advantages depending on your business needs. Keep reading to find the best fit for your brand.

How to choose a payment provider

1. Shopify Payments

Shopify Payments is Shopify’s built-in payment solution, designed to work seamlessly with its platform. It supports over 400,798 e-commerce stores and handles $18 billion in gross merchandise value annually .

Here’s why Shopify Payments stands out for CPG brands:

Key Features for CPG Brands

1. Transparent Pricing

Shopify Payments offers a straightforward pricing model based on your Shopify subscription plan:

This tiered structure allows businesses to choose a plan that aligns with their sales volume and budget.

2. Enhanced Security

Shopify Payments includes built-in tools to protect your business and customers:

• Machine learning for fraud detection
• 3D Secure authentication
• Automated handling of disputes
• Proxy detection
• Prevention of card testing

With 75% of consumers abandoning brands after security breaches , these features are crucial for maintaining trust.

3. Multi-Channel Capabilities

Shopify Payments integrates across multiple sales channels, enabling brands to:

• Process both online and in-person transactions
• Sync inventory across platforms
• Access unified financial reports

This integration simplifies operations and provides a complete view of your business performance.

Important Notes:

• A $15 fee applies for chargebacks on disputed transactions .
• International transactions incur a 4.4% fee plus currency conversion costs .
• Best suited for U.S.-based merchants selling physical products .

"Only with Shopify Payments can you track your orders and payments all in one place. Have a complete view of your finances, accept local currencies and payment types for a smooth checkout experience." – Shopify

For CPG brands focused on domestic markets, Shopify Payments offers an all-in-one solution with competitive rates, strong security, and streamlined integration. It’s particularly well-suited for sellers of physical products, thanks to its fraud prevention tools and chargeback management .

Next, let’s take a closer look at PayPal and its capabilities for CPG brands.

2. PayPal

PayPal is a major player in digital payments, handling over 200 billion transactions and supporting 36 million merchants worldwide . For Shopify CPG brands, it offers several key advantages.

Fee Structure for CPG Businesses

PayPal’s fees depend on the type of transaction and its location:

While the fees might be slightly higher than some competitors, PayPal offsets this with strong security and customer trust.

Security and Trust Features

PayPal is well-regarded for its security measures, which inspire confidence among customers:

• 69% of customers report feeling safer shopping with PayPal-enabled merchants .
• Purchase Protection covers both the purchase price and original shipping costs .
• Most claims are resolved within 14 days .
• Real-time package tracking reduces "item not received" disputes by 80% .

These features not only protect buyers but also help merchants avoid common transactional issues.

Performance Optimization

PayPal’s tools help businesses streamline transactions and improve customer experiences:

• Fastlane by PayPal speeds up checkout by 32% .
• Returning customers make 13% more repeat purchases .
• Checkout delays are reduced by 50% .

These performance improvements make PayPal an efficient choice for scaling businesses.

Advanced Business Tools

PayPal also supports growth with features like multi-currency processing for global sales and invoicing tools .

"The relationship we have with PayPal has been extremely positive and it has allowed us to reach more people around the world, which has been crucial to our growth. And having that type of relationship with the PayPal team is super rewarding." – David Serpa, Director of Finance and Corporate Treasury, Younique

Customer Experience Enhancement

PayPal simplifies the checkout process with:

• One-touch checkout for faster transactions .
• Buyer and seller protection programs for added peace of mind .

For Shopify CPG brands looking to scale, PayPal combines trusted security, smooth performance, and customer loyalty – making it a strong option despite slightly higher fees .

3. Stripe

Stripe handled around $1 trillion in transactions in 2023 – equivalent to about 1% of global GDP . For CPG brands using Shopify, Stripe provides tools that grow alongside your business.

Fee Structure

Stripe offers straightforward pricing with clear fees:

Advanced Fraud Protection

Stripe Radar, its AI-driven fraud prevention system, offers robust protection:

• Blocked 16.7 million fraudulent transactions
• Achieves a low false positive rate of 0.1%
• Costs $0.05 per transaction screened

Revenue Recovery Tools

Stripe’s Smart Retries system helps businesses recover lost revenue from failed payments by:

• Recovering an average of 57% of failed recurring payments
• Using machine learning to optimize retry timing
• Drawing insights from data across 1.14 million websites

Global Commerce Features

Stripe simplifies international operations for CPG brands with:

• Support for over 135 currencies
• Automatic card updates to reduce payment declines
• Integrated subscription management directly within Shopify

Performance and Scalability

Stripe’s infrastructure is built to handle large transaction volumes while maintaining speed and reliability. Features like automatic card detail updates minimize payment failures, which is especially valuable for brands managing subscriptions or recurring orders .

Developer Integration

Stripe also offers a range of developer tools and APIs, allowing businesses to create tailored checkout experiences while maintaining high security standards .

With its strong security, global reach, and developer-friendly tools, Stripe stands out as a reliable choice for CPG brands. Up next, we’ll take a closer look at Authorize.Net.

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4. Authorize.Net

Authorize.Net processes a staggering $149 billion annually across more than 430,000 merchants . For Shopify-based CPG brands, it offers tools specifically designed for businesses that face higher risks or need stronger security. Here’s a closer look at its pricing and features.

Pricing Breakdown

Authorize.Net has two pricing options to suit varying business needs:

Security Features

Authorize.Net prioritizes security with measures like annual PCI DSS renewals, advanced fraud detection, and compliance with HIPAA and GLBA standards. Regular third-party audits ensure everything stays up to date. It also supports eCheck/ACH processing for affordable bank transfers and offers recurring billing options for subscriptions and repeat orders .

Coverage and Global Reach

Although its primary focus is the United States, Authorize.Net also serves businesses in Canada, the UK, the EU, and Australia, enabling multi-currency transactions . For businesses earning over $500,000 annually, it offers custom pricing, third-party merchant account integration, and advanced analytics tools .

Payment System Capabilities

Built for handling large transaction volumes, Authorize.Net supports a variety of payment methods and employs automated monitoring to reduce fraud risks. With its robust security and specialized tools, it’s an excellent option for CPG brands looking for a secure and efficient payment gateway.

5. Amazon Pay

Amazon Pay provides a smooth and efficient checkout experience when combined with Shopify Payments .

Pricing Structure

Here’s how the costs compare when Amazon Pay is integrated with Shopify Payments:

Conversion Benefits

Using Amazon Pay has been linked to a 35% boost in conversion rates compared to native checkouts .

"At first, we implemented Amazon Pay based primarily on the growth of Amazon’s reputation in France. Today, we see that the Amazon Pay option has completely revolutionized the way our customers make purchases."
– Ludwig Dumortier, Head of Strategic Project Management

Security and Fraud Prevention

Amazon Pay includes strong fraud prevention tools .

"I feel like I should have gotten it earlier. There’s a lot of fraud in (credit card) processing. It was a great marriage to include Amazon Pay because of the low amount of fraud. It’s a great way to pay. It’s very simple. Ease of checkout has been awesome."

These measures ensure a safer and more reliable checkout for both businesses and customers.

Checkout Experience

Amazon Pay’s Checkout Session system simplifies the payment process with features like:

• Address Management: Automatically retrieves shipping details.
• Payment Options: Handles one-time or recurring charges.
• Session Management: Keeps transactions active for up to 24 hours.
• Data Security: Automatically deletes checkout data after 30 days.

"Amazon Pay gives confidence to the shoppers that we reach in international markets, who might not know Reserving.com."

Business Tools Integration

When paired with Shopify Payments, Amazon Pay offers centralized tools for tracking transactions, unified reporting, easy disbursement, and simpler reconciliation .

Feature Comparison

Here’s a breakdown of key features for popular payment gateways tailored for CPG brands:

Security and Compliance

All listed gateways meet PCI DSS compliance standards, ensuring secure payment handling. They also offer varying levels of encryption, tokenization, and fraud prevention measures to protect transactions.

Integration Capabilities

Stripe stands out for its advanced customization options, though it requires technical skills to fully utilize its features . Shopify Payments, on the other hand, integrates seamlessly with Shopify’s platform, making it an easier choice for CPG brands already using Shopify. These differences can impact how smooth the overall customer experience feels.

Customer Experience Impact

The choice of a payment gateway can directly affect conversion rates. Research indicates that 11% of online shoppers abandon their carts when their preferred payment method isn’t available . Ensuring a range of payment options is key to retaining customers.

Mobile Optimization

Mobile payment features vary across providers. For CPG brands, supporting mobile wallets and offering a smooth checkout process across devices is critical for success in an increasingly mobile-first shopping environment.

Processing Speed and Reliability

Each gateway offers distinct advantages in processing speed and reliability. Shopify Payments benefits from its tight integration with the Shopify platform, delivering consistent performance. Other gateways, like Stripe and PayPal, shine in specific operational areas, depending on the needs of the business.

Recommendations

Here’s a breakdown of payment gateway options tailored to different types of Shopify-based CPG brands:

For Small to Mid-Sized CPG Brands

Shopify Payments is a top pick for most small to mid-sized CPG brands using Shopify. With processing fees between 2.4% to 2.9% + $0.30 per transaction, it offers competitive rates and integrates directly with the Shopify platform.

"If you’re already running your business on Shopify, the platform’s own payment gateway is a no-brainer."

For Subscription-Based CPG Products

If your products rely on subscriptions – like meal kits or recurring deliveries – Stripe is an excellent choice. Its advanced tools for managing subscriptions and customization make it well-suited for recurring payments. Stripe charges a standard fee of 2.9% + $0.30 per transaction and includes Radar, its fraud detection system, which has blocked over 16.7 million fraudulent transactions .

For International Markets

For brands with a global customer base, PayPal is a solid option. While its fees are slightly higher at 3.49% + $0.49 per transaction, its widespread recognition builds trust among international shoppers. According to Chargeback.io:

"74% of customers are more likely to buy from an unfamiliar store if PayPal is an option."

For High-Risk CPG Categories

If your business deals with high-risk products like supplements or niche food items, Authorize.Net is worth considering. It offers strong security features and chargeback management for a $25 monthly fee plus transaction costs.

Security Considerations

No matter your business type, protecting customer data is critical. Look for gateways that provide:

• PCI DSS compliance
• Strong encryption
• Tokenization
• AI-driven fraud detection

The right payment gateway will depend on your business model, transaction volume, and target audience. Aim for a balance between security, cost, and features that align with your needs.

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