Shop Pay: What It Is, How It Works, and How To Use It

One of the biggest considerations for ecommerce store owners is their website’s user experience. Are customers in and out in a quick and convenient way? Most importantly, is there anything that’s causing them to abandon their carts or otherwise fail to follow through with checkout? Shop Pay checkout is one solution to this.

Shop Pay helps to build a seamless experience for users, saving their information so they can complete their order in a few clicks. Customers can also access features like setting up monthly payments to ease the cost burden. You can enable it on your Shopify store, as well as through social channels like Google, Instagram, and Facebook.

In this article, we’ll take a dive into what this feature is, how Shop Pay checkout works, and how you can use it to help boost your customer experience.

Start selling online now with Shopify

Start your free trial

What is Shop Pay?

Shop Pay is an accelerated checkout solution Shopify introduced in 2017. It securely stores the payment information customers enter on a store’s checkout page and then autofills it on return visits. This allows for faster purchases and eliminates the need to re-enter billing and other details.

Shop Pay saves the following payment details:

Email address
Shipping information, such as the customer’s address
Billing information, such as the customer’s address
Credit card details, such as the card number, CVV code, and expiration date (all information is encrypted)

Besides saving customers time when they check out, Shop Pay helps merchants expand their shipping methods with local delivery and pickup options. Plus, sellers can use Shop Pay to accept payments on other channels like Google, Facebook, and Instagram.

How does Shop Pay work?

Shop Pay saves and encrypts payment information on its PCI-compliant servers. Customers only have to provide this information once, and the solution will prefill it for them in all future visits. Shop Pay allows for one-click checkout—a convenience that can encourage customers to return and buy more.

Shop Pay vs. Shopify Payments

While the names seem similar, it’s important to remember that Shop Pay and Shopify Payments aren’t the same thing. There’s a key difference: Shopify Payments is a payment processor, or a service that allows businesses to accept payments from their customers.

Other payment processors include PayPal, Stripe, Square, and Amazon Pay. It’s critical to have at least one payment processor setup on your site so you can collect money from your customers.

On the other hand, Shop Pay is a tool that relies on payment processors to work. It’s more like an optional add-on that makes the experience smoother and easier once you already have your payment processor in place. Shop Pay acts as a digital wallet that stores customer information for fast checkout and provides other perks. Other digital wallets include Apple Pay and Google Pay.

You can see the differences on a Shopify store.

If you have Shopify Payments set up in your store, it will be what customers use to pay if they don’t choose any other options. It shows as the standard Checkout or Pay Now button.

Shop Pay will show up as a separate button. It often shows as an “Express checkout” option alongside other payment processors and digital wallets.

Shop Pay’s key features

Shop Pay has many interesting features. Below is a quick overview of the key ones.

Shop Pay installments

With Shop Pay, you can give customers the option to split the cost of their purchase into multiple payments. Those who opt to use Shop Pay can make four interest-free installments, or monthly installments spread across 12 months. However, Shop Pay installments only apply to orders between $ 50 and $ 3,000, and the merchant pays a 5% to 6% fee on each transaction.

Marketing automations

Shop Pay checkout modules allow for plenty of marketing automations. You can set up automated messages featuring hot deals, post-purchase offers, and more to drive conversions and repurchases. Shop Pay merchants can implement automated marketing before, during, and after the purchase.

Checkout customization

You’ve spent time building your brand experience. It should extend to your checkout page. That’s just what Shop Pay lets you do. Pick and choose what you want your customers to see, including shipping and pickup options, product recommendations, or past orders. And, of course, you can customize your content and layout to showcase your online store, like branding elements, contact info, and more.

Dedicated button

What good is a payment solution if it’s not easy for you—and your customers—to use? Shop Pay’s dedicated button is an added boost of convenience. It’s easy to recognize and can be placed directly onto your checkout page, as well as in social channels like Facebook, Instagram, and Google. Just keep in mind that your online store needs to be hosted on Shopify to use the Shop Pay button on your storefront.

Mobile app

Today’s entrepreneur doesn’t tap away at their computer all day. They have places to go and things to do. You can install the Shop dedicated mobile app, which helps make sure you can do business anytime, anywhere. Access all of the features we’ve listed, all from your phone or tablet.

How to set up Shop Pay for your store

It only takes a few minutes and a few clicks to enable Shop Pay in your store—just as simple to set up as many other payment methods. Let’s walk through the steps.

1. From inside your Shopify dashboard, go to Settings > Payments.

Shop Pay setup

2. At the top right of the Payments section, click Manage.

3. Scroll down to Shop Pay and check the blue box.

4. Save your changes at the bottom of the page.

If you’re using a third party to process payments, and would like to add Shop Pay, the steps are slightly different:

From inside your Shopify dashboard, go to Settings > Payments.
Head over to the Third-Party Payment Providers area and select Manage.
Find the Shop Pay section. Enable Shop Pay by checking the box and save your changes.
Inside the Shop Pay section, click Complete Set Up.
Enter the needed information, including your store’s details and banking into.
Save your changes.

Installing the Shop channel

The Shop app is one of Shopify’s biggest steps toward speeding up the checkout process and making the customer experience a breeze. According to Shopify, merchants who enable Shop Pay have seen up to an 18% boost in conversion rates for returning customers.

The cool thing about the Shop app is that it’s a standalone curation app that customers can use to connect with the types of stores and experiences they’re looking for.

By installing the Shop channel into the back end of your store, you can access some of the features we discussed above, like customizing your store and setting up automations. You can also access tracking and analytics features to help build your business even more.

To install, add the Shop channel app from the Shopify App Store.

Shop channel app

Once you’ve added the channel, it will show up under Sales Channels in the left sidebar of your Shopify dashboard. You’ll be able to set up marketing features, import your store’s products, access performance analytics, and more.

Shop app settings

Enable Shop Pay on your store today

If you’re looking for an easy way to boost your customer experience—while boosting revenue and loyalty—Shop Pay is a great place to start. It’s easy to set up, easy to manage, and can save your customers critical time during the checkout process (time that may otherwise cause them to abandon their cart!).

If you’re already running a Shopify store, you can set up Shop Pay in a few minutes. You can also add it to your social shopping channels to give your customers a multi-channel boost.

Today’s customer has high demands and high expectations of the stores they do business with. As a store owner, it’s your responsibility to leverage tools and tech that helps deliver. Shop Pay can be one of the tools in your arsenal for building a better business.

Shop Pay FAQ

Can I use Shop Pay without a Shopify Store?

Yes, you can use Shop Pay even if you do not have a Shopify store. The accelerated checkout is available to merchants with Google, Facebook, and Instagram shops. However, using Shop Pay without Shopify means you can’t take advantage of Shopify’s payment gateway, which waives transaction fees for merchants.

What is a Shop Pay code?

A Shop Pay code is a six-digit code the checkout sends to a customer’s phone to verify their identity for a purchase. Customers just need to type the code into the checkout screen and wait for Shop Pay to enter their payment details to process the transaction.

Is Shop Pay safe?

Yes, Shop Pay is very safe. The checkout processor uses multiple layers of security to safeguard customer information, including end-to-end encryption, PCI compliance, and SMS text verification. This makes it an excellent choice for merchants particular about data security.