Our Take
The bottom line:
Shop Pay, an accelerated checkout function for Shopify storefronts, is a great solution for online businesses trying to reduce cart abandonment and make the checkout process as convenient as possible. Customers can use it to securely store their payment information and finish shopping in one to two clicks. It lets them complete purchases from a Shopify store, social media or the Shop app.
Shop Pay
Payment processing fees
2.6% + 10¢ in-person; 2.9% + 30¢ online with Shopify’s Basic plan.
Monthly fee
$39.00 and up for Shopify’s e-commerce plans.
Pros & Cons
Pros
- Included if you use Shopify Payments as your processor.
- Accelerated checkout may help decrease cart abandonment rates.
- Shop Pay Installments lets you offer buy now, pay later options.
Cons
- Limited to business owners already using Shopify’s POS system.
- Shopify costs can quickly add up.
Full Review
Are you a shopper who came across Shop Pay during checkout?
Shop Pay streamlines the checkout process by allowing you to save your credit card and billing information for next time. You can also use it to purchase items straight from Instagram or Facebook without leaving the site. While NerdWallet doesn’t have a specific article dedicated to how customers use Shop Pay, we do have resources on buy now, pay later options (which Shop Pay offers) and shopping smart on social media.
How does Shop Pay work?
Shop Pay is an accelerated checkout service offered by Shopify POS. If you already have a Shopify storefront, you can enable the feature from your admin page. It lets customers store credit card, email, shipping and billing information. Then, when they return to your store, the checkout fields are automatically filled out. Shop Pay allows customers to pay in installments, too.
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
Shopify Payments is an integrated payment processing service that lets Shopify merchants accept credit cards and other methods of payments. Shop Pay, on the other hand, is an accelerated checkout feature used to speed up the checkout process, and it needs to be paired with a payment processor to work correctly. You can use Shop Pay with Shopify Payments or a third-party payment processor, as long as you have a Shopify storefront.
» Looking for third-party payment processors? Check out our list of best payment processing companies.
Is Shop Pay safe?
Shopify follows standard security protocols by encrypting customer payment details and storing them on its PCI-compliant servers. The data is only available to stores when an order is placed. NerdWallet’s article on PCI compliance provides more details on these security standards and what they mean for your business.
Shopify
Shopify POS
NerdWallet Rating
5.0
Starting At
2.6% + 10¢
in-person; 2.9% + 30¢ online (Basic plan).
Read Review
Learn more
on Shopify's website
Shop Pay is best for businesses that:
- 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.
- 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.
- 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
» MORE: Shopify pricing and plans
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:
- Four interest-free payments every two weeks for orders between $50 and $999.99.
- 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
PayPal Checkout
PayPal
PayPal
NerdWallet Rating
4.8
Starting At
2.29% + 9¢
In-person; 2.89% + 49¢ online.
Read Review
Learn more
on PayPal's website
PayPal Checkout is another accelerated checkout option that functions a lot like Shop Pay or Amazon Pay. It lets customers use their PayPal information to complete transactions using a variety of methods, including PayPal, Venmo and other payment types that include buy now, pay later options. You will need a PayPal Business account to use Checkout. Read our full PayPal Business review for more details.
Square POS
Square
Square POS
NerdWallet Rating
5.0
Starting At
2.6% + 10¢
in-person; 2.9% + 30¢ online.
Read Review
Learn more
on Square's website
Square is more of a complete POS system solution than PayPal Checkout or Amazon Pay. The all-in-one product offers POS hardware for in-person sales, a website for selling online, POS software and payment processing under the same roof. This makes it a good solution for businesses that do both in-person and online sales. You can also use it to send abandoned cart email nudges to customers who didn’t complete a transaction. Read our full Square POS review for more details.
Stripe
Stripe
Stripe Payments
NerdWallet Rating
5.0
Starting At
2.7% + 5¢
in-person; 2.9% + 30¢ online.
Read Review
Learn more
on Stripe's website
Like Shopify, Stripe is mostly intended for online transactions, though it’s more focused on processing transactions than building out your website. Its key feature is its customizability. Unlike Shop Pay or even Shopify Payments, for example, Stripe can be integrated with your existing website to process a variety of payment types. Read our full Stripe review for more details.
Amazon Pay
Amazon Pay
Amazon Pay
NerdWallet Rating
4.0
Starting At
2.9% plus $0.30
For online and mobile.
Similar to Shop Pay, Amazon Pay makes the online checkout process quicker and easier for customers with an Amazon account. Essentially, it lets them autofill information from their Amazon account to complete online purchases on other sites. Merchants need an Amazon Seller account to make use of Amazon Pay, but there are no monthly, setup or termination fees. Read our full review of Amazon Pay for more details.
Methodology
NerdWallet’s ratings of payment processing providers rewards companies whose products and services are priced well and work in a variety of payment scenarios, among other criteria.
Ratings are based on weighted averages of scores in several categories, including overall cost, hardware and software options, system capabilities, customer service, contract requirements and integrations. Learn more about how we rate payment processing providers.
These ratings are a guide, but fees, hardware, software and contract requirements can vary widely from business to business and provider to provider. We encourage you to shop around and compare several providers.
NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.
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