eCommerce Essentials: Shopify Shop Pay

Shopify, influenced by competition like klarna and clearpay has made bold moves with its SaaS platform and is now offering Shop Pay and Shop Pay Installments.

Shop pay is a slick integrated credit and debit card payment gateway that’s free with your Shopify store, or at least you don’t pay extra for the privilege of processing payments as the fee is included in your Shopify monthly cost.

Shopify Payments Installments or SPI – Shopify love a good acronym – makes Shop Pay not only a  payment gateway but it allows your customers to split payments into instalments for your products making sure you get paid faster.

Shop Pay

Shop Pay is the best-converting checkout experience on the internet. By using an accelerated one-click checkout, it is now trusted by over 100 million shoppers worldwide. Shop Pay is included with Shopify Payments and 100% of the delivery emissions will be automatically offset, a nice little environmentally conscious touch.

•  4x faster checkout
•  1.7x higher checkout-to-order rate
•  1.91x higher conversion rate on mobile

Shop Pay Installments

Shop Pay Installments is powered by Shop Pay and is the most popular Buy Now, Pay Later provider on Shopify. SPI allows merchants to maximise their customer’s buying power so shoppers can:

• Split purchases into four, interest-free payments, for orders between $50 – $3,000 USD (Sorry Europe)
• 0% interest
• No additional, hidden, or late fees or impact on their customers’ credit scores.

That’s nice, but how do Shop Pay and Shop Pay Installments create value for me?

Merchants are seeing a tremendous impact as a result of Shop Pay Installments, including up to:

•  50% increase in average order value
•  28% decrease in cart abandonment
•  23% boost of repeat purchases among first-time buyers
•  17% reduction in sales refunds.

Merchants also unlock value through

• Upfront Payments: Merchants receive the full purchase amount upfront, with fewer fees.
• One Integrated Solution: Merchants can offer a seamless, transparent checkout experience to customers with no redirects, all while tracking sales and fees in one place from the Shopify admin.
• Avoid Overselling: Because Shop Pay Installments is fully integrated with their online store, merchants can avoid overselling during flash sales.

How to determine if you are a good fit for Shop Pay Installments?

You should focus on your current strategy for checkout and conversion rate optimisation. 

Key discovery questions to ask yourself include:

• What is my current and target AOV (average order value)? What strategies are we leveraging in order to grow AOV?
• How am I focused on increasing conversion rates?
• Do I know what our abandon cart rate is?
• Do I have flash sales or product drops?

How much does Shop Pay and Installments cost merchants?

Shop Pay

It is included with Shopify Payments.

Shop Pay Installments

As is standard with any instalments provider, merchants will pay a transaction fee on every order (only once per order) where the buyer paid using SPI. For Core merchants, the transaction fee is 5.9% + 30¢, and for Plus merchants it’s 5% + 30¢. Shopify Payments credit card rates are included in these fees.

I think Shop Pay is a great option for your store, why pay more than you need to shop pay fees are included in with your Shopify fees so essentially the gateway is free.

One big caveat here is that the SPI is not quite ready for the UK or European stores (as of 20th July 2022). We’re hoping that this will change shortly as SPI promises and has demonstrated a great feature set, providing benefits that will really help boost your revenue. Follow us for more updates on the future of Shopify.

Get in touch to discuss your Shopify store integrations and what we can do to increase your online store conversion rate.