Configuring Shopify Payments

Set up notifications and fraud prevention

  1. In the Shopify Payments section, click Edit.

  2. Select the notification and fraud prevention setting that you want:

    The checkboxes for Notifications and Fraud prevention

  3. Click Save.

Here’s the information you need to decide whether you want the boxes checked off or not:

Notifications

By default, Shopify sends you an email whenever a new payout is sent to your bank account. The email includes the amount paid, and a link to the payout in your shop, so you can review the included order and customer details. You can turn these emails on or off at your convenience in your Shopify Payments settings.

Fraud prevention

Shopify Payments can do enhanced fraud analysis checks to let you know if an order is potentially fraudulent. Shopify Payments has two fraud filters that you can choose to enable, AVS and CVV:

Address Verification System (AVS)

AVS compares the numeric part of the customer’s billing address and zip code to the information on file with the credit card issuer. This helps reduce a significant amount of fraud, because unauthorized users might not have the billing address information for the credit card they’ve stolen.

Card Verification Value (CVV)

The CVV is a 3 or 4 digit number on the back of the customer’s credit card. Credit card companies prohibit the storage of the CVV code, so asking for the CVV is a way of ensuring that a customer has the card physically in their possession. Credit card information stolen from a merchant database is also less useable, because it shouldn't contain CVV information.

3D Secure

3D Secure for credit cards is an additional authorization method for online Visa and Mastercard transactions. During checkout, your customers are asked to verify their identity with their bank before completing a purchase.

When you turn 3D Secure on in your checkout, a fraudulent chargeback can't be filed for the order. You can turn on 3D Secure on the Payment providers settings page in your Shopify admin.

If you are not using Shopify Payments, then you can use a third-party payment provider that supports 3D Secure in the checkout. Learn more about third-party payment providers that support 3D Secure.

Steps:

  1. In the Shopify Payments section, click Edit.

  2. In the Fraud prevention section, click Edit next to 3D Secure.

  3. Select On.

  4. Click Save.

Edit bank account information

If you change banks, or need to update your bank account details for some reason, you can do this easily from within the Shopify Payments settings. You can't use prepaid bank cards as bank account credentials to receive payouts from Shopify Payments.

Steps:

  1. In the Shopify Payments section, click Edit.

  2. In the Bank account box, click edit:

    The edit link for the bank account you use for Shopify Payments

  3. Enter your bank account information.

  4. Click Save.

Edit customer billing statement

You can change the statement that appears on your customer's credit card bill when they make a purchase on your store. Consider adding the name of your store, so that your customers know what the credit card charge was for. You can also add your phone number so that customers can call you if there is a problem.

  1. In the Shopify Payments section, click Edit.

  2. Under the "Customer billing statement" box, click edit:

    The edit link for the bank account you use for Shopify Payments

  3. Enter the billing statement and your phone number.

  4. Click Save.

Update your tax details

When you set up Shopify Payments, you need to enter your tax details. All businesses need to submit a tax ID. If you are a sole proprietor and don't have a tax ID, then you can submit your Social Insurance Number (SIN) or the last four digits of your Social Security Number (SSN) instead.

If the tax ID that you submit is not valid, then you have to update it. When you're required to update your tax details, you receive an email from Shopify and a notification appears on the home page of your Shopify admin.

Steps:

  1. In the Shopify Payments section, click Edit.

  2. Click Update business details:

    The Update business details link

  3. In the Tax details dialog, enter your tax information.

  4. Click Save.

Tax reporting

As a merchant, you are required to abide by all applicable regulations, including tax reporting. Depending on your jurisdiction, Shopify Payments might also be required to report your sales to the local tax authorities.

The United States, Australia, and Europe have unique tax reporting requirements.

United States

In the United States, if you process more than $20,000 and have more than 200 transactions, then you are required to submit a 1099-K form to the IRS. This form is generated by Shopify Payments and provided to both you and the IRS on an annual basis.

Account owners can download a copy of the 1099-K in the payments section of the Shopify admin:

  1. In the Shopify Payments section, click View payouts:

  2. Click Documents.

    The View payouts button for Shopify Payments

  3. Click Download PDF next to the 1099-K tax form.

Australia

In Australia, you need to file the amount of GST paid on transaction fees with the government. To get this information, you can either download a generated invoice, or export a file with your transaction information.

Download a generated invoice

You can download monthly invoices to submit with your tax claim. Each invoice includes the total GST paid on transaction fees for all orders made in your store that month. This feature uses the UTC timezone, which might be different from your store's timezone. If you want a report that uses your store's timezone, then you can export a list of your store's transactions as a CSV file.

The invoice for each month is generated on the 5th of the following month. For example, the invoice for June is generated on July 5th. If you had no transactions with Shopify Payments for a certain month, then no invoice is generated for that month.

Steps:

  1. In the Shopify Payments section, click View payouts:

    The View payouts button for Shopify Payments

  2. Click the ... button to expand the sub-menu, and select Documents.

  3. On the Tax documents dialog, click Download PDF next to the invoice you want to download.

You can now submit this invoice with your tax claims.

Export transactions

You can export a list of your store's transactions as a CSV file. It includes a GST column for Australian merchants.

Steps:

To export your transactions:

  1. In the Shopify Payments section, click the View payouts button:

    The View payouts button for Shopify Payments

  2. Click Transactions.

  3. Click Export. A CSV file downloads in your browser.

  4. Open the CSV file in a spreadsheet editor.

  5. The last column of the CSV file displays the amount of GST collected on each transaction.

  6. Use the SUM tool to calculate the total amount of GST you've collected.

Europe

Shopify Payments fees do not include Value-Added Tax (VAT) for stores in Europe with the exception of Ireland. You may need to account for VAT at the local applicable tax rate on your VAT return. To get this information, you can either download a generated invoice, or export a file with your transaction information.

For stores in Ireland, 23% VAT is charged in addition to the Shopify Payments fees.

Download a generated invoice

You can download monthly invoices to submit with your tax claim. Each invoice includes the total VAT paid on transaction fees for all orders made in your store that month. This feature uses the UTC timezone, which might be different from your store's timezone. If you want a report that uses your store's timezone, then you can export a list of your store's transactions as a CSV file.

The invoice for each month is generated on the 5th of the following month. For example, the invoice for June is generated on July 5th. If you had no transactions with Shopify Payments for a certain month, then no invoice is generated for that month.

Steps:

  1. In the Shopify Payments section, click View payouts:

    The View payouts button for Shopify Payments

  2. Click the ... button to expand the sub-menu, and select Documents.

  3. On the Tax documents dialog, click Download PDF next to the invoice you want to download.

You can now submit this invoice with your tax claims.

Export transactions

You can export a list of your store's transactions as a CSV file. It includes a VAT column for European merchants.

Steps:

To export your transactions:

  1. In the Shopify Payments section, click the View payouts button:

    The View payouts button for Shopify Payments

  2. Click Transactions.

  3. Click Export. A CSV file downloads in your browser.

  4. Open the CSV file in a spreadsheet editor.

  5. The last column of the CSV file displays the amount of VAT collected on each transaction.

  6. Use the SUM tool to calculate the total amount of VAT you've collected.

Verify your identity

After you've made a significant number of sales by using Shopify Payments, you need to verify your identity through the Payment providers page in your Shopify admin. You can verify your identity by submitting a government-issued photo ID or your SIN.

When you're required to submit a photo ID, you receive an email from Shopify and a notification appears on the home page of your Shopify admin.

Until you verify your identity, you are not able to use your Shopify Payments account. If the photo ID that you submit cannot be verified, then you need to resubmit it.

Steps:

  1. In the Shopify Payments section, click Edit.

  2. Click Submit photo ID:

    The Submit photo ID link

  3. In the Submit photo ID dialog, click Choose file.

  4. Select a picture of a photo ID from your device.

  5. Click Submit.

After your photo ID is verified, you can use your Shopify Payments account again.

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