What Happens If I Deactivate Shopify Payments

Deactivating Shopify Payments means turning off Shopify’s built-in payment system and switching to a different provider or payment gateway. For UK merchants, this decision can affect transaction fees, payout timing, reporting, and the overall checkout experience. Understanding the consequences of deactivation before making the change will help you avoid disruptions to your business.

What Deactivation Really Means

When you deactivate Shopify Payments, you stop using Shopify’s internal payment processing system and rely entirely on an external provider such as PayPal, WorldPay, or another approved gateway. This switch removes the integrated benefits of Shopify Payments, such as automatic payouts, built-in reporting, and reduced transaction fees.

Essentially, you are separating your payment processing from Shopify’s unified platform. This gives you more flexibility but also introduces additional administrative work and potential costs.

Immediate Consequences of Deactivation

The most immediate impact is that you lose access to Shopify’s native payment features. Shopify Payments automatically records sales, tracks payouts, and integrates directly into your dashboard. Once deactivated, you will need to monitor transactions through your new provider’s system instead.

You will also start paying Shopify’s third-party transaction fees, which are applied whenever an external gateway processes a payment. These are in addition to the card processing fees charged by the new provider. For many small businesses, these added costs can make external gateways less cost-effective than Shopify Payments.

Pending payouts from Shopify Payments will still be processed, but only if your account and bank details remain valid. If you deactivate the gateway before all transactions are settled, it is vital to ensure your payout information is still accurate, or you risk delays in receiving funds.

Chargebacks and refunds for previous orders will continue to be handled through Shopify Payments, even after deactivation. However, you may have limited access to dispute management tools once the system is turned off, so it’s important to resolve any open cases before making changes.

Effect on Checkout and Customer Experience

One of the biggest differences you’ll notice after deactivating Shopify Payments is a change in your checkout process. Shopify Payments allows customers to pay directly within your store using credit or debit cards, digital wallets, or local payment methods such as Klarna. When you switch to another gateway, customers may be redirected to an external checkout page to complete their payment.

While some third-party gateways offer a seamless experience, others can add friction by requiring extra steps or unfamiliar interfaces. This can lead to lower conversion rates if customers find the process confusing or inconvenient. If customer experience and simplicity are priorities, keeping Shopify Payments active is often the better choice.

Financial and Operational Impact

Shopify Payments provides transparent pricing and automatic reconciliation, making it easier to track revenue and fees. When you deactivate it, you’ll need to adjust your bookkeeping processes to account for separate payment reports and invoices from your new provider.

Different gateways also have varied payout schedules. Shopify Payments usually transfers funds to your bank account within three business days for UK merchants, but some third-party providers can take longer. Delayed payouts can affect cash flow, especially for businesses that rely on quick access to funds to cover inventory or expenses.

If you sell internationally, switching gateways might also affect how you handle currency conversions. Shopify Payments automatically manages multi-currency payments, but other gateways may have separate fees or restrictions for foreign transactions.

Reporting and Data Management

Deactivating Shopify Payments affects how sales and payments are reported in your Shopify admin. With Shopify Payments, every order and payout is linked, creating a clear financial trail. When using a third-party processor, you’ll need to manually reconcile Shopify order data with your payment provider’s reports.

This can increase the time you spend on accounting and make it harder to track fees accurately. You may also lose access to Shopify’s detailed payout reporting, which breaks down transactions, fees, and refunds in one place. If you rely on this level of transparency for bookkeeping or tax purposes, it’s worth exporting your data before deactivating the service.

Fraud Prevention and Security

Shopify Payments includes built-in fraud analysis tools that help identify suspicious orders and reduce the risk of chargebacks. When you deactivate it, you’ll depend on your new provider’s fraud prevention measures, which may not integrate directly into Shopify’s risk indicators.

Some external gateways have excellent fraud protection, while others may require additional setup or subscriptions to achieve similar security levels. Reviewing the fraud management features of any new provider before deactivation is essential to maintaining customer trust and compliance with payment security standards.

Steps to Take Before Deactivation

Before you turn off Shopify Payments, check your current balance and payout schedule. Make sure all transactions are settled and that your bank account can still receive payments. If any orders are in dispute, resolve them through Shopify before deactivation to avoid complications.

Next, choose your new payment provider carefully. Compare processing fees, transaction costs, and payout timelines. It’s also a good idea to test the new checkout process to ensure it works smoothly and doesn’t create confusion for customers.

Once you’ve confirmed your new payment gateway is functioning correctly, update your store’s checkout page and any customer-facing information about accepted payment methods. Make sure your privacy policy and terms of service reflect the change in payment handling.

When Deactivation Might Be a Good Idea

There are scenarios where deactivating Shopify Payments makes sense. For example, if your store operates in an industry considered high risk by Shopify Payments, you might not qualify to use it. In that case, an external provider that specialises in your sector may be necessary.

Large businesses that process very high transaction volumes may also find that they can negotiate lower fees directly with third-party gateways. In such cases, the potential savings could outweigh the convenience of Shopify Payments.

However, for most small and medium-sized UK merchants, Shopify Payments remains the most cost-effective and user-friendly solution. The system is optimised for local banking, supports common UK payment methods, and eliminates unnecessary fees.

Key Considerations After Deactivation

After you deactivate Shopify Payments, continue monitoring your bank account for pending payouts or refunds. Keep detailed records of your Shopify Payment transactions for accounting and tax purposes, as this information will not update once the service is turned off.

Make sure your new provider’s transaction data integrates correctly with your financial software. Any mismatch between order numbers and payment references can create confusion during reconciliation or reporting.

If you plan to reactivate Shopify Payments later, be aware that you’ll need to go through the verification process again. This includes submitting your business and banking details, and in some cases, identity documents.

Conclusion

Deactivating Shopify Payments has practical and financial implications that every merchant should understand before making the change. It removes the simplicity of Shopify’s integrated system and introduces new transaction fees, administrative tasks, and potential delays in payouts.

While some businesses benefit from switching to a third-party gateway, most UK merchants find that Shopify Payments offers the best combination of convenience, security, and cost-effectiveness. Unless you have a strong reason to move, keeping Shopify Payments active helps maintain a smooth checkout experience, faster payouts, and streamlined financial reporting.

In the end, the decision comes down to balancing flexibility against simplicity. If your business demands special features that only another provider can offer, deactivation may be worth it. But for most online sellers, Shopify Payments remains the most straightforward and reliable way to manage payments on your Shopify store.