What is Shop Pay And How Does It Work?

If the curiosity to learn about Shop Pay is keeping you awake, then this blog can help you.

It may not help you get your sleep back, but it will definitely satisfy your curiosity about Shop Pay.

Shop Pay is a compelling feature by Shopify to accelerate your checkout process. This feature aims to finish a transaction in the fastest way possible with complete security.

In this blog, we will take a deeper look at What Is Shop Pay, draw insights into its functionalities, and encounter its inner workings.

So, let’s start!

Table of Contents

• What is Shop Pay?
• Shop Pay Benefits: For Merchants And Customers
• Shop Pay vs. Shopify Payments
• How Does Shop Pay Work?
• Shop Pay Set Up: Shopify & Other Platforms
• How to Deactivate Shop Pay?

What is Shop Pay?

Shop Pay is an accelerated checkout solution launched by Shopify in 2017.

It saves your customer’s payment information and autofill it on their next purchase. It securely stores payment information like:

• Email address
• Credit card details
• Shipping information
• Billing information

This Shopify Shop Pay feature eliminates the need to re-enter the information. It increases the conversion rate by making the checkout faster and convenient.

Currently, around 1.7 million users (store owners) trust Shop Pay to streamline their customer’s checkout experience.

Shop Pay Benefits: For Merchants And Customers

Shop Pay not only benefits you as a merchant but also your customers.

And anything that makes your customer happy is a win, right?

It’s a win-win feature!

Shop Pay Benefits: For Merchants

• Increases conversion rate and decreases cart abandonment rate
• Helps you win customer’s trust with the PCI-compliant servers by Shopify
• Not just limited to Shopfiy, it can be used for other e-commerce platforms too
• Mindful approach towards sustainability goals. It allows you to support their carbon removal project and be a part of doing good for the environment.

Shop Pay Benefits: For Customers

• Faster checkout process for the customers, without re-entering the payment details
• Customers can store multiple credit cards and addresses (up to 5 each) for faster checkout
• Offers flexible payment options to the customers through Shopify Installment Plans (more on that later)
• Customers can find log of all previous payments in Shop Pay
• Get personalized product recommendations based on the previous purchase patterns
• The Shop Local feature enables the customers to make payments to offline stores

Brands like Colourpop, Skims, Princess Polly USA, Allbirds, and more were quick enough to unlock the complete potential of Shop Pay for their business.

Shop Pay vs. Shopify Payments

Now, there can be a little confusion here between Shop Pay and Shopify Payments. However, they belong to the same family but are very different (just like siblings.)

Let’s understand the key difference between them.

1. Functionality

• Shop Pay: Shop Pay is a checkout optimization solution designed to make the checkout process faster by storing the shipping and payment information of the customers.
• Shopify Payments: Shopify Payments is a payment processing solution that allows store owners to accept payments without the need for any third-party platform.

2. Focus areas

• Shop Pay: This tool totally focuses on optimizing the checkout process and saving your customers time during checkout.
• Shopify Payments: This is a payment gateway that focuses on helping Shopify store owners to accept payments.

Shopify Payments is like a standalone tool, Shop Pay leans on Shopify Payments to complete a transaction.

How Does Shop Pay Work?

Here’s how Shop Pay works:

• The customer enters required information on the product page, for e.g. shipping address, and credit card details.
• Shop Pay authorizes the action through a security code sent to their email or text, and stores the payment information.
• Now, the same information is used for payments whenever they chooses to pay using Shop Pay on any store.

Shop Pay saves the payment information on its PCI-compliant servers. An important thing to note here is your customers need to enter their email addresses during checkout in order to save their payment information.

Customers can also download the Shop Pay App and enjoy an uninterrupted shopping experience. The app is available on the Android and iPhone stores.

Customers can quickly finish a transaction using their debit or credit card or opt for Shop Pay Installments.

Cards Supported By Shop Pay

The following cards work smoothly with Shop Pay Shopify:

• Visa
• Visa Debit
• Mastercard
• American Express

Shop Pay Installments

Shopify Shop Pay Installments, in partnership with Affirm, lets customer opt for the Buy Now, Pay Later option both online as well as offline. It allows your customers to split their purchase into four equal, interest-free payments, paid every two weeks.

Here are some eligibility criteria and installment options for customers:

• The customer must be over the age of 18 and should reside in the US.
• This feature is only available for U.S.-based businesses that use Shopify Payments and Shop Pay.
• The order amount must be between $50 and $3,000.

Shop Pay doesn’t check for any credit score for this payment option, but customers will need to go through an identity verification. In case of late fees or missing payments, it doesn’t charge any penalty or fees, but the customer can get banned from using their Shop Pay Installments Shopify feature.

Interestingly, Shopify Shop Pay has a premium version as well.

This premium version allows payment cycles for up to 12 months and monthly installments of up to 24 months (including interest) for orders between $50 to $17,500.

Image source: Shopify

Shop Pay Set Up: Shopify & Other Platforms

Here’s how you can enable Shop Pay on Shopify and other platforms.

Shop Pay Set Up: Shopify

If you are using Shopify Payments, you get Shop Pay automatically without any additional fees.

Follow these steps to activate Shop Pay:

Head to your Shopify admin and go to Settings > Payments

In the Shopify Payments, click Manage

Now, from the Shop Pay section, select Shop Pay

And click Save

That’s how straightforward it is to add Shop Pay to Shopify.

You can also change the language of the checkout page–it supports 20+ languages.

Shop Pay Set Up: Other Platforms

Shop Pay works smoothly for other ecommerce platforms, Facebook, and Instagram pages.

You can activate Shop Pay for your third-party gateway if your store is in the United States and meets the Shopify Payments requirement. 

Here are the steps to activate it:

Head to Shopify admin and go to Settings > Payments

Navigate to Third-Party Payment Providers and select Manage

Find and enable Shop Pay and click Save

Now, from the Shop Pay section, click Complete Set Up and fill in the needed information

Save your changes

You need to finish the setup, including your business details and other banking information, to start receiving payments. If you have not completed the entire setup in 21 days, then all the payments you receive will automatically be refunded to the customers.

How to Deactivate Shop Pay in Shopify?

Here are the steps to deactivate Shop Pay:

1. In Shopify admin, go to Settings > Payments
2. In the Shopify Payments section, click Manage
3. In the Shop Pay section, uncheck Shop Pay
4. Click deactivate
5. And save the changes

It might occur to you that does Shop Pay charges merchant fees, and the answer is no.

Shop Pay doesn’t charge any fee, but if, as a merchant, you use Shopify, then a transaction fee is applied.

Conclusion

And that is everything you need to know about Shopify Shoppay.

We hope you are clear about Shop Pay, How to use Shop Pay? and other functionalities around it.

Shop Pay is an effective feature worth trying when your business has returning customers, as it creates less friction during checkout. And most customers love having such a seamless experience!

Thank you for reading and sending all the good luck for your business. ✨

Frequently Asked Questions

1. Is Shop Pay Safe?

Yes, Shop Pay is safe and secure. Your customer’s information is stored securely on Shopify’s PCI-compliant servers.

2. Does shop pay affect credit score?

No, Shop Pay doesn’t affect your credit score.

3. How many buyers actually use Shop Pay?

43% of buyers prefer Shop Pay during the checkout process.

Related Posts:

• Learn to Add Apple Pay to Shopify Store?
• How to Add Stripe to Shopify