Shopify Payments for the United States

Businesses based in the United States can use Shopify Payments to accept Visa, Mastercard, American Express, Discover, and Diners Club debit and credit cards.

Businesses in the United States can also accept payments using Bancontact, and iDEAL.

Requirements for Shopify Payments

To use Shopify Payments, ensure that you can meet the following requirements.

Prohibited businesses

Some types of businesses and services are not permitted to use Shopify Payments. To see whether you can use Shopify Payments, check the list of prohibited business types for the United States.

More details can be found in the Shopify Payments Terms of Service (TOS).

Bank account requirements for Shopify Payments

Make sure that your bank account meets the following requirements before you connect it to Shopify Payments:

• The bank account is a full checking account with a bank in the United States in USD currency.
• The bank account is eligible for ACH transfers.

Checking accounts that are set up to accept only wire transfers don't work with Shopify Payments. Savings accounts, flex-currency accounts, and money-transferring services that mimic bank accounts aren't supported by Shopify Payments. Although virtual bank accounts are supported, you might experience more payout failures with these accounts.

To confirm that your account can accept the transfer type listed for your region, contact your bank.

Two-step authentication requirements for Shopify Payments

To receive your payouts from Shopify Payments, you need to set up two-step authentication for your Shopify account. If you don't have two-step authentication active, then your payouts might be placed on hold.

Personal information requirements for Shopify Payments

In response to regulations in different countries, you're required to provide information about you and your business. The information is collected to help identify merchants using Shopify Payments, including the beneficial owners of a particular corporate entity. The purpose of collecting this information is to comply with regulatory requirements designed to prevent money laundering, terrorist financing, and other financial crimes.

As local rules and regulations evolve, Shopify and its partners might contact you to collect additional information about you and your business. These standard reviews can occur at any time during the lifespan of your Shopify Payments account.

The information that Shopify is required to collect differs from country to country, but typically includes details about the following:

• the individual creating the Shopify Payments account
• the business associated with the Shopify Payments account
• the individuals who ultimately own or control the business, which includes the business owner or a senior executive with legal signing authority for the business

To help the verification process, when providing documents as evidence, ensure that your documentation:

• is clear and and large enough to read
• is correct, valid, and up-to-date
• is complete with all details visible
• is free of any errors or typos
• matches the information provided

Acceptable document types for individuals and businesses in the United States include the following.

Identity documents:

• Passport
• Passport card
• Driver license
• State-issued ID card
• Resident permit ID / U.S. Green card
• Border crossing card
• NYC card
• U.S. visa card
• Birth certificate

Company/entity documents:

• IRS Letter 147C
• IRS SS-4 confirmation letter

Caution

Your Shopify Payments information is verified based on IRS records. When you set up Shopify Payments for your business, you must enter your Employer Identification Number (EIN) and business name, owner name, or organization name exactly as it's registered on your IRS CP575 notice or Letter 147C. This is the same name that you enter on your IRS W-9 form.

If you're unsure about these details, then you should verify them with the IRS, or consult a tax professional.

Accepting payments

In most countries, when your business is a sole proprietorship you're automatically set up to accept all major payment methods as soon as you create your Shopify store with Shopify Payments activated. Your card rate is based on your store's Shopify subscription plan, and you can change plans whenever you want.

Note

You can receive payouts in a different currency than the currency that you sell in while using Shopify Payments. For more information, see Selling and getting paid in different currencies.

Businesses in the United States can accept Visa, Mastercard, American Express, Discover, and Diners Club debit and credit cards. Additionally, accepting Discover automatically allows acceptance of Elo, JCB, and UnionPay.

Businesses in the United States can also accept payments using Bancontact, and iDEAL.

Pay periods

Your pay period refers to the amount of time between the date that a customer's payment is captured and the date that those funds are sent to your bank account. The date and time that a customer's payment is captured is recorded in UTC time. Funds from payments that are captured on Friday, Saturday, and Sunday are grouped and sent together as one payment.

Note

The funds might not appear in your bank account right after they're sent. Banks typically take between 24-72 hours to process deposits to your bank account.

In the United States, the pay period is 2-5 business days depending on how you verify your banking information and secure your account. To help ensure that you receive your payouts quickly, ensure that you've completed the following:

• Activate two-step authentication for your Shopify account.
• Verify your bank account with Plaid for your Shopify Payments account.

Learn more about getting paid with Shopify Payments.

Tax reporting

As a merchant, you're required to follow 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. It's your responsibility to consult with local tax authorities or a tax professional to verify the regulations that apply to you.

In the United States, your payment settlement entity is required to file a 1099-K form to the IRS if you meet any of the following criteria:

• You receive more than 20,000 USD in gross payments and have more than 200 transactions.
• You meet your state's individual thresholds.

Tip

To see more videos, visit our YouTube channel.

Note

The IRS planned to implement a blanket threshold of $600 US for all states for the 2022 tax year, but delayed its plans. Refer to the IRS announcement for more information.

Shopify is required to submit a 1099-K form to the IRS for your transactions that are processed through Shopify Payments, and you are required to report these values when you file your income taxes. This form is generated by Shopify Payments and it is provided both to you and to the IRS on an annual basis. Only store owners can access information that is related to the 1099-K form.

Note

If you need Shopify to report your income to the IRS under your personal name and Social Security Number (SSN), then set your business type in Shopify Payments as Individual/sole proprietor.

If you need Shopify to report your income to the IRS under your business name and Employer Identification Number (EIN), then set your business type in Shopify Payments as LLC, Corporation, Nonprofit, or Partnership. Learn more about setting up Shopify Payments.

For more information about what business type applies to your store, you should consult with a tax professional.

The form that you receive from Shopify only accounts for transactions that have been processed by Shopify Payments. Transactions that have been processed by other gateways, such as PayPal, are accounted for on a separate form provided by that gateway.

Store owners can download a copy of the 1099-K in the payments section of the Shopify admin.

Learn more about the 1099-K form on the official website of the IRS.

Desktop

1. From your Shopify admin, go to Settings > Payments.
2. In the Shopify Payments section, click View payouts.
3. Click Documents.
4. Click Download PDF next to the 1099-K tax form.

If you need to refer to a list of transactions that will be accounted for in your 1099-K form, then store owners can download them in CSV format.

Desktop

1. From your Shopify admin, go to Settings > Payments.
2. In the Shopify Payments section, click View payouts.
3. Click Transactions.
4. Click Export.
5. Select 1099-K Transactions.
6. Choose the date range of transactions to download.
7. Click Export items.

Connecting your bank account with Plaid

Plaid is a secure service that enables you to connect your Shopify Payments account to your bank account to receive payouts. Connecting your bank account with Plaid helps verify your banking details and enables shorter pay periods so that you can get your payouts faster.

If you've already connected your bank account to your Shopify account, then refer to Verify your bank account with Plaid.

Steps:

1. From your Shopify admin, go to Settings > Payments.
2. In the Shopify Payments section, click Activate Shopify Payments.
3. In the Submit information about your business section, click Submit details.
4. Select your business type, then enter the required details, and then click Continue account setup.
5. In the Secure your account with two-step authentication section, click Turn on two-step.
6. Enter a phone number and complete setting up two-step authentication, and then click Turn on.
7. In the Add your banking information section, click Add bank account.
8. Click Connect a bank account via Plaid, and then click Continue.
9. Select your banking institute, and then click Continue.
10. Sign into your bank with your online banking credentials, and then click the bank account that you want to connect to Shopify Payments.
11. Check the box to agree to the terms and conditions, and then click Connect account information.
12. To finish connecting your bank account with Plaid, click Continue.

Verify a connected bank account with Plaid

If you've already connected your bank account to Shopify Payments manually, and you want faster payouts, then you can verify your bank account with Plaid.

Steps:

1. From your Shopify admin, go to Settings > Payments.
2. In the Shopify Payments section, click Manage.
3. In the Payout details section, click Change bank account.
4. Click Connect a bank account via Plaid, and then click Next
5. Select your banking institute, and then click Continue.
6. Sign into your bank with your online banking credentials, and then click the bank account that you want to connect to Shopify Payments.
7. Check the box to agree to the terms and conditions, and then click Connect account information.
8. To finish connecting your bank account with Plaid, click Continue.