In general, payment IDs and destination tags are used to identify transactions to merchants and exchanges. ShapeShift requires a payment ID or destination tag for all incoming deposits in XMR, XRP, and STEEM.
Conversely, some exchanges and merchants require a payment ID or destination tag when ShapeShift sends funds to them. Payment IDs are used in Monero whereas destination tags are used in Ripple and STEEM.
Ex. 1: Sending XMR to ShapeShift (Shifting XMR to BTC)
When shifting from XMR to BTC, for example, you will need to include a payment ID on the incoming deposit to ShapeShift. This payment ID is provided by ShapeShift on the order page. In most wallets, there will be an optional field to include a payment ID when sending XMR. This ensures that we know where the funds are coming from and can exchange them successfully for the outgoing asset.
Ex. 2: Sending XMR as the outgoing asset to a wallet at an exchange (Shifting BTC to XMR)
Certain XMR wallets at exchanges and merchants require a payment ID for all incoming deposits. If XMR is the outgoing asset and your wallet requires one, you must include it in order for your wallet to detect the funds. If you are unsure if your wallet requires this, it is best to check before shifting. Your wallet will provide the payment ID for you. You will simply need to enter it in the payment ID field on the order page in addition to the other information necessary.
Ex. 3: Sending XRP to ShapeShift (Shifting XRP to BTC)
When shifting from XRP to BTC, for example, you will need to include a destination tag on the incoming deposit to ShapeShift. If you are using an XRP client wallet you will need to use the special format we provide on the order page. It will look something like this: "rwfGzgd4bUStS9gA5xUhCmg1J86TMtmGMo?dt=10002653".
If you are using an exchange, a third party wallet, or a multi-coin wallet there may be separate fields for the address and the destination tag. You will separate them both and only include the numbers at the very end of the string in the destination tag field (Ex. "10002653").