What is Shop Pay and How Does It Work?

What is Shop Pay?

Shop Pay is a helpful online checkout service provided by Shopify. It's designed to make it easy for repeat customers to shop quickly and reduce the chances of them leaving items in their cart without completing the purchase.

To save their payment info, customers need to provide an email address during checkout. If they only provide a phone number, they won't be prompted to save their information. ShopPay securely stores shipping and billing details on Shopify's PCI compliant servers, and this info is only shared with your store when a customer places an order.

It's worth noting that every purchase made through Shop Pay contributes to carbon removal projects without any additional cost to the customer. If your customers have questions about how Shop Pay functions or how their data is handled, they can find more information on the Shop Pay Help Center page.

Please keep in mind that you can't simulate a test order using Shop Pay. To test Shop Pay, you'll need to place a real order and then cancel and refund it. For more details on testing, you can refer to the "Place a test order with a real transaction" resource.

How Does Shop Pay Work?

For small businesses, incorporating Shop Pay on their websites can speed up the payment process for customers. Because Shop Pay remembers and uses their payment info, returning customers are less likely to abandon their shopping carts before completing their purchases. This convenience can be a real asset for online businesses.

Activation: Small businesses can activate or deactivate Shop Pay through their Shopify account settings. It's available to businesses using Shopify's own payment processing or third-party payment providers.

Checkout Process: When customers use Shop Pay during checkout, they are directed to an order review page. After confirming their purchase, they receive a six-digit code via text or email. This code is used on the checkout page to complete the order.

Convenience: If customers return to make another purchase using the same device, they can use their saved information without needing to verify themselves again. This streamlines the checkout process.

Account Management: Customers have the flexibility to change their Shop Pay account information and opt out of Shop Pay at any time.

Delivery Options: Shop Pay allows customers to choose between pickup or delivery options if the business offers these services.

Language Support: Shop Pay is available in multiple languages, including Chinese, Czech, Danish, Dutch, English, Finnish, French, German, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Spanish, Swedish, Thai, Turkish, and Vietnamese.

How to Activate Shop Pay?

To activate Shop Pay, follow these steps,

On Desktop:

• Go to your Shopify admin.
• Navigate to Settings > Payments.
• In the Shopify Payments section, click on "Manage."
• In the Shop Pay section, check the box for Shop Pay.
• Save your changes by clicking "Save."

On iPhone (Shopify app):

• Open the Shopify app.
• Tap the three-dot menu icon (…) and select "Settings."
• In the "Store settings" section, tap "Payments."
• In the Shopify Payments section, click on "Manage."
• Find the Shop Pay section, and check the box to enable Shop Pay.
• Save your settings by clicking "Save."

On Android (Shopify app):

• Launch the Shopify app.
• Tap the three-dot menu icon (…) and select "Settings."
• In the "Store settings" section, tap "Payments."
• In the Shopify Payments section, click on "Manage."
• In the Shop Pay section, check the box to activate Shop Pay.
• Save your changes by clicking "Save."

What is the Difference Between Shop Pay and Shopify Payments?

The difference between Shop Pay and Shopify Payments is quite simple:

Shopify Payments is a service that allows small businesses to accept various payment methods, including credit cards, after they set up a Shopify account and activate this feature. It's all about handling payments.

Shop Pay, on the other hand, relies on services like Shopify Payments or third-party providers to actually process transactions. It's more about the checkout experience, making it faster and more convenient for customers.

Both of these services may involve fees and rules, especially when it comes to processing credit card transactions, which might include fees from the card issuer, the acquirer, and the credit card company itself. So, Shopify Payments handles payment processing, while Shop Pay enhances the checkout process for customers.

What are the Eligibility for Shop Pay Installments?

To be eligible for Shop Pay Installments and understand how it works, here are the key points:

Eligibility Requirements and Credit Score

• You must be at least 18 years old.
• You should reside in the United States.
• You need to make payments in US Dollars (USD) to use Shop Pay Installments.
• Using Shop Pay Installments won't impact your credit score when your purchase is split into 4 bi-weekly payments. However, if your purchase is split into monthly payments, those payments may be reported to a credit bureau.

Please note that you must have a US shipping address to use Shop Pay Installments.

Fees or Penalties

• If you split your purchase into 4 bi-weekly payments, there are no extra charges or interest rates.
• But if you choose monthly payments, there may be interest applied.
• You have the option to pay off your balance early without any penalty.
• There are no late fees, but not making full or timely payments might affect your ability to use Shop Pay Installments in the future.

Restricted Items

• Shop Pay Installments cannot be used to purchase certain items, including:
  • Cash advances
  • Illegal items or activities
  • Weapons, including parts and accessories
  • Narcotics
  • Regulated products like alcohol, tobacco, or drug paraphernalia
  • Currency, including cryptocurrency
  • PayPal, Venmo, and other money transfer services
  • Loan and credit card payments

How Do I Verify My Shop Pay?

To verify your Shop Pay and make a purchase through an online store, follow these steps:

• When you're ready to make a purchase, you'll see the Shop Pay button on the product page, in your cart, or during the checkout process.
• Click on the Shop Pay button.
• Enter your email address, or if you've set up a passkey, select the passkey icon in the email field.
• Depending on your choice
  • If you selected the passkey icon, follow the prompts to sign in using your saved passkey.
  • If you've set up Shop Pay, you'll receive a six-digit SMS verification code on the phone number associated with your Shop Pay account. In the "Confirm it's you" section, enter this six-digit code.
  • If you've previously verified your Shop email address during Shop Pay setup, you can click the "Send me a code by email instead" option.
• Review your order to ensure everything is correct.
• Finally, tap "Complete purchase" to confirm and complete your order.

How to Make Payments Using Shop Pay Installment?

Making payments using Shop Pay Installments is easy, and here's how it works in simple terms:

Payment Options:

• When you shop online or in-store with Shop Pay, you have two payment options.
• You can either pay the full amount at checkout.
• Or, you can choose to split your purchase into regular payments using Shop Pay Installments.

Eligibility:

• Shop Pay Installments are available for orders over $50 USD, which includes any discounts, shipping costs, and taxes.

Payment Plans:

• If your purchase falls within the range of $50 USD to $17,500 USD, you can use Shop Pay Installments.
• For purchases between $50 and $999, you can select the "Pay in 4" option.
• This means you make interest-free payments every 2 weeks.
• It won't affect your credit score.
• For purchases between $150 and $17,500, you can choose to "Pay monthly."
• This offers payment terms of 3, 6, or 12 months.
• The annual percentage rates (APR) can range from 0% to 36%.
• Applying for this option also won't impact your credit score.

Is Shop Pay safe?

Absolutely, Shop Pay is a safe way to make payments. Here's why:

Payment Encryption: When you use Shop Pay, your payment details are encrypted. This means they are converted into a secure code, making it extremely difficult for anyone to access your sensitive information.

Secure Storage: Your payment information is stored on Shopify's servers, which are compliant with the Payment Card Industry (PCI) standards. These are strict security protocols and practices designed to protect your card transactions.

Limited Sharing: Your payment information is only shared with the business you're buying from when you place an order. It's not shared or exposed to others