Recurring application charges

Overview

You can charge merchants for your applications on a recurring billing cycle by creating and issuing a recurring application charge. The recurring application charge is applied every 30 days from the day the store owner accepts the charge. This means a shop will have its own 30-day billing cycle with Shopify, plus an independent 30-day cycle for each recurring app charge.

Here's an example timeline:

Day 0 Shop signs up; 30-day Shopify billing cycle starts
Day 5 App is installed; 30-day recurring app billing cycle starts; recurring charge is added to shop's next invoice.
Day 30 Shop is invoiced; app charge appears for the first time.
Day 35 Recurring charge cycle restarts; recurring charge is added to shop's next invoice.
Day 60 Shop is invoiced; app charge is included.

Once a recurring application charge is activated and approved, the system has to handle the case where future payments are declined for some reason. If a shop stops paying its bills, Shopify will freeze the account. This means that your recurring application charge will be frozen as well and you will not get paid. In the event that a shop starts payments again the shop will be unfrozen and charges will resume.

A status diagram explaining the recurring charge process.

From the app developer perspective, service should continue to be provided to a shop as long as their recurring charge is in the Active state.

Upgrades and downgrades

Each shop can have only one active recurring application charge per app. If you activate a new recurring application charge (e.g. service upgrade) for a shop that already has a recurring application charge in place, the existing recurring application charge will be cancelled and replaced by the new charge. This means that upgrading and downgrading a store owner's recurring application charge or plan is straightforward: just change their plan and have them accept the new recurring charge.

When a merchant upgrades their plan by moving from a less expensive charge to a more expensive charge, the charge is prorated based on the difference in price and the number of days remaining in the billing cycle.

For example, a merchant begins a 30-day billing cycle on a $5.00 plan then upgrades to $15.00 plan on day 15 of the billing cycle. The merchant would be charged $5.00 + ($15.00 - $5.00) * (15/30) = $10.00 USD.

When a merchant downgrades their plan by moving from a more expensive charge to a less expensive charge, the merchant is automatically offered an application credit based on the difference in price and the number of days remaining in the billing cycle. This application credit can be used towards any future application purchase on Shopify.

For example, a merchant begins a 30-day billing cycle on a $20.00 plan then downgrades to a $10.00 plan on day 15 of the billing cycle. The merchant would be offered an application credit for ($20.00 - $10.00) * (15/30) = $5.00 USD. The partner payout will automatically be adjusted based on the issued credit and the partner revenue share.

To see Recurring Application Charge endpoints, view our RecurringApplicationCharge Reference guide.