What Is Shop Pay and How Does It Work?
Full Review
Are you a shopper who came across Shop Pay during checkout?
How does Shop Pay work?
Images courtesy of Shopify.
Aside from making the checkout process almost instantaneous, Shop Pay also lets you sell directly from your business’s Instagram and Facebook pages. That means customers don’t have to leave social media to complete their purchases. To activate this feature, you’ll need to install the Facebook and Instagram channel from Shopify’s app store and go through the onboarding process to begin marketing your products on social media.
Shop Pay vs. Shopify Payments
Is Shop Pay safe?
Starting At
2.6% + 10¢
in-person; 2.9% + 30¢ online (Basic plan).
Shop Pay is best for businesses that:
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Focus mostly on online sales: Shop Pay is best suited for business owners who do most or all of their business online, since the bulk of its key features — like the ability to sell on social media and speed up the checkout process — are primarily relevant to online sales.
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Have repeat customers: If your business benefits from customers making frequent, repeat purchases, Shop Pay could make those purchases easier and faster, building customer loyalty and potentially reducing the number of abandoned carts.
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Already have a Shopify account: If you already have a Shopify account, enabling Shop Pay should be a no-brainer. If you don’t already have one, here are some pointers on getting started with Shopify.
Deciding factors
Where Shop Pay stands out
Comes included with Shopify Payments
You should be able to enable Shop Pay in just a couple of clicks if you already have a Shopify account and opted to use Shopify Payments (the company’s integrated payment processing service). And since Shop Pay uses Shopify Payments’ transaction rates, your transaction fees will decrease as you subscribe to higher-tier plans.
May decrease cart abandonment rates
When you’re shopping online, it’s tempting to just click over to the next tab in your browser when you see how much information you need to fill out to complete a purchase. Since Shop Pay streamlines the checkout process, it has the potential to decrease your online shop’s cart abandonment rates and give your customers instant gratification.
Enables buy now, pay later options
To qualify for Shop Pay Installments — a buy now, pay later option from Affirm — your business must be located in the U.S., sell in USD and use Shopify Payments. Additionally, customers’ purchases must be between $50 and $20,000.
Typically, the following customer payment options are available:
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Four interest-free payments every two weeks for orders between $50 and $999.99.
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Monthly payments made on orders between $150 and $17,500.
For customers, the annual percentage rate, or APR, on these installments ranges from 0% to 36% of the purchase price. A premium option is also available to eligible merchants and allows for interest-free payments on longer repayment terms than two months. Generally, your business pays a fee of 5% to 6% for each Shop Pay Installments transaction, based on various business factors and Affirm’s underwriting.
Where Shop Pay falls short
Only available for Shopify users
Shop Pay is built exclusively for business owners who already use Shopify. If you’re using a different POS system or e-commerce platform, switching over to Shopify just for Shop Pay is likely not worth the effort — especially since other accelerated checkout options are available (see below).
Shopify costs can add up
Shopify’s base-level plan pricing is reasonable, but things get expensive when you opt to add POS Pro capabilities to your subscription. POS Pro, which costs another $89 per month, adds additional in-person selling features to your POS plan, like inventory management, staff management and omni-channel selling. Additionally, some of Shopify’s higher-end website templates cost extra upfront.
Alternatives to Shop Pay
Starting At
2.29% + 9¢
In-person; 2.89% + 49¢ online.
Starting At
2.6% + 10¢
in-person; 2.9% + 30¢ online.
Starting At
2.7% + 5¢
in-person; 2.9% + 30¢ online.
Starting At
2.9% plus $0.30
For online and mobile.
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