Shop Pay by Shopify

What is Shop Pay, how does it work, and how to integrate it into your own Shopify web store.

Shopify's Shop Pay system can be beneficial for both Shopify stores and non-Shopify merchants.
Shopify’s Shop Pay system can be beneficial for both Shopify stores and non-Shopify merchants.

Business owners need to consider several factors when launching and operating a retail website. In addition to the typical business-centric topics such as pricing, profit margins, marketing and advertising and the general everyday operations, they also need to address how to convert random shoppers into paying customers by improving their website’s user experience. Are shoppers finding what it is they want to buy? Are they purchasing in a quick and efficient manner? If not, what’s stopping them from finalizing their purchases. Baymard Institute reports that the average of abandoned carts on websites is a staggering 70%. That means for most online retailers, regardless of size, only three out of ten shoppers will complete the purchase process. 70%. One out of three. 70%. That’s a lot of money and lost sales left on the table.

Shopify has since come up with a solution to help reduce the amount of abandoned carts through Shop Pay.

What is Shop Pay?

Shop Pay is an accelerated checkout system that allows customers to save their EMail address, credit card information, shipping addresses, and billing addresses. Shop Pay allows customers to store their credit card information, EMail address, shipping information, and billing information and then use it automatically when they return to a website. Whenever a customer places an order, payment information is encrypted, stored securely, and only accessible to stores. Shop Pay can help small businesses facilitate faster payments on their websites. Customers who use Shop Pay automatically remember and apply their payment information are less likely to abandon their shopping carts.

Shop Pay not only saves customers time when they check out, but also expands merchants’ shipping options with local delivery and pickup. Shop Pay can be used by sellers to accept payments on other channels, including Google, Facebook, and Instagram.

Shop Pay Features

  • Shop Pay Installments – With Shop Pay, customers can split the payment of their purchase into multiple installments. Shop Pay allows users to make four interest-free installments, or 12 monthly installments spread across 12 months. Merchants are subjected to a 5% to 6% fee on each Shop Pay transaction, though this is only applied towards orders between $50 and $3,000.
  • Automated Marketing – Several marketing automations can be implemented with Shop Pay’s checkout modules. Drive conversions and repurchases with automated messages featuring hot deals, post-purchase offers, and more. Merchants can also automate marketing processes before, during, and after purchases.
  • Customizable Checkout – Shop Pay lets store owners pick and choose what it is they want their customers to see, such as shipping and pickup options; product recommendations; and past orders. The content itself can also be configured to suit the store’s branding and corporate identity, contact information, and more.
  • Dedicated Button – The dedicated button on Shop Pay adds another level of convenience. Easily recognizable, it can be placed directly on the checkout page as well as in social media channels like Facebook and Instagram. Shop Pay is only available on Shopify-hosted online stores.
  • Shop Pay Mobile App – The Shop Pay mobile app is available for both merchants and general customers. Just as customers can keep tabs on their purchases, merchants can use the app and conduct business from anywhere, anytime on-the-fly.

The Difference Between Shop Pay and Shopify Payments

The names may be similar, but Shop Pay and Shopify Payments are not the same product. Shopify Payments is an integrated payment processing service that takes the hassle out of setting up third-party payment providers or merchant accounts and then having to enter those credentials into Shopify. Shopify Payments automatically Shopify store owners to accept credit cards and other forms of payments after setting up their Shopify accounts.

Shop Pay does, however, rely heavily on Shopify Payments or other third-party providers for payment processing. It serves as a digital wallet that saves customer information for quick checkout and offers other benefits.

How Does Shop Pay Work?

Shop Pay stores and encrypts payment data on Shopify’s own PCI-compliant servers. Customers need only to have to provide their EMail address at checkout and their payment information will be autofilled in subsequent visits. Customers that only leave a phone number in the contact field are not prompted to save their information. Stores using Shop Pay can take advantage of the one-click checkout, which can help promote return visits and encourage more sales.

The Shop Pay Checkout Process

  • Shop Pay customers are taken to the order review page when they check out. An EMail or text message containing a six-digit code is sent to them after they authorize the purchase. Upon entering the six-digit code on the checkout page, the order is processed.
  • Customers won’t have to verify themselves again if they decide to make a return visit, so long as they’re using the same device that was used to make the original purchase.
  • Shop Pay customers can update their account information and opt out at any time.
  • Shop Pay provides customers with the option to pick up or have their order delivered if a business offers such options.
  • Multilingual support is available in Chinese, Czech, Danish, Dutch, English, Finnish, French, German, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Spanish, Swedish, Thai, Turkish and Vietnamese.

How to Integrate Shop Pay

Shop Pay is easy to set up and manage and can improve the user experience by expediting the checkout process which can help significantly reduce the number of abandoned carts. Getting Shop Pay up and running is as easy as setting up any other payment method. Store owners on the Shopify platform can set up Shop Pay in just a few minutes. Plus, it can be added to social media shopping channels for an additional multichannel boost.

NOTE: Even retailers that do not have a Shopify store can use Shopify’s Shop Pay. However, using Shop Pay without a Shopify store means that those retailers without Shopify cannot use the Shopify payment gateway and will be subject to transaction fees that would’ve normally been waived if they had a Shopify store.

  • In the Shopify dashboard, click Settings > Payments.
  • On the Payments section, click Manage.
  • Scroll down to Shop Pay. Check the blue box.
  • Save your changes.

For stores using third-party payment processors:

  • Go to Settings > Payments in your Shopify dashboard.
  • In the Third-Party Payment Providers section, click Manage.
  • Locate the Shop Pay section. Check the Shop Pay box and save your changes.
  • On the Shop Pay page, click Complete Setup.
  • Fill out the required information, including the details of your store and your banking information.
  • Save your changes.

The Shop App

Shopify’s Shop app is one of their biggest steps towards improving customer experience and speeding up checkouts. Shopify reports that merchants using Shop Pay have seen up to an 18% increase in conversion rates for returning customers.

As a standalone curation app, the Shop app is an ideal way to connect customers with their ideal stores and experiences. Installing the Shop channel into your store will give you access to features such as customizing your store and automating your processes. On top of that, you can also utilize tracking and analytics features to boost your business.

To install the Shop app, add it from the Shopify App Store. The channel will appear under Sales Channels in the left sidebar of your Shopify dashboard once you’ve added it.

Shop Pay Support

There are three dedicated support channels for merchants on Shopify:

  • A community of users where you can interact with others, participate in online events, and ask questions.
  • An online help center with FAQs and user manuals for Shop Pay.
  • EMail and chat support.

Is Shop Pay Right for My Store?

Shop Pay is helpful for small businesses that want to offer their customers an easier way to pay via their websites. Shop Pay automatically remembers and applies a customer’s payment information during and after checkout, which may lessen the likelihood that a customer will abandon their shopping cart at the point of checkout.

Shop Pay is most suitable for businesses that are primarily online. That’s not to say businesses that operate both online and in physical locations cannot benefit from Shop Pay; it’s just that most of Shop Pay’s unique features–such as fast checkout and the ability to retain and recall customers’ payment data in the future–are most relevant to Internet-based retailers. Furthermore, if your business depends heavily on repeat purchases from customers (such as in B2B), Shop Pay could make those purchases more efficient, enabling you to build customer loyalty and to reduce the number of abandoned carts.

Shop Pay gives customers an easy, secure, and fast checkout experience and online retailers, whether they’re currently on Shopify or not, can benefit from the increased sales and conversion performance the service can provide.

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