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Shop Pay, owned by Shopify, offers a simple, one-click payment solution for online shoppers to save their payment information for faster checkouts in the future. Not only that, but it provides a way for online merchants to offer another payment method to their customers, and they can sell from multiple platforms like on Facebook, Google, or an online store. The merchant doesn't even need to have a Shopify store. In addition, Shop Pay promotes local businesses, plants trees for all transactions completed, and lets customers split their payments into multiple transactions. So, what is Shop Pay? Keep reading to learn all about it.

What is Shop Pay? The Basics

Shop Pay has two primary functions: it's a wallet for online consumers to save payment details and speed up transactions in the future, but it's also a payment method that merchants can add to their stores, giving customers this option and providing additional benefits.

To use is as a wallet, a customer would download the app, fill in their payment information, then save that on their device to make online checkouts faster. This way, they don't have to take out their credit card, or even type in personal information, every time they want to make a purchase.

Shop Pay stores the following payment information:

Mobile phone number
Credit card details like the number, expiration date, and CVV code (all encrypted and PCI compliant for security)
Billing details like the customer's address
Shipping details like the customer address

Overall, Shop Pay is a convenient payment method and checkout solution for online consumers. As long as the merchant allows for Shop Pay payments, customers can take advantage of its benefits. In fact, Shop Pay is available for any online seller, not just those that use the Shopify ecommerce platform; merchants can also accept payments through the payment solution when selling on websites like Facebook and Google.

The accelerated checkout system from Shop Pay ensures that customers can process payments faster. For merchants, it provides the opportunity for more conversions, particularly repeat purchases.

It comes with a bundle of exceptional features to explore. Aside from saving customers heaps of time when they check out, Shop Pay also comes with features like local pickup and delivery options. And all information is safe and private; billing and shipping data stays on Shopify’s PCI ready servers and merchants don’t save any information on their servers, so they're at less risk of issues with compliance regulations.

How Does Shop Pay Work?

The basic Shop Pay features make for a rather intuitive shopping experience, but there's much more to it. To answer the question of “how does Shop Pay work?” it's best to go over all of its features.

Here are the primary features (for online shoppers) to give you an idea of how it all works:

A Cart Filler

The whole point of Shop Pay is to speed up the checkout process for all online customers. Therefore, users only have to type in payment information once; after that, the tool automatically recognizes your profile when visiting a participating online store.

All previously entered billing information is encrypted and saved so that customers only have to click one Buy Now button to fill in a checkout form, eliminating the need to pull out a credit card or even type in your name.

Paying in Full or with Shop Pay Installments

Perhaps one of the most exciting features from Shop Pay is how the customer can choose to either pay in full at the moment of purchase or spread it into multiple payments.

Here's how it works:

The customer picks Shop Pay Installments.
They get to choose to make four equal installments instead of one full payment.
The customer selects a debit or credit card to pay the first payment and future installment payments.
The account walks customers through a brief identity verification process to pay later. Eligibility is more about preventing fraud. They don't check credit scores.
The customer agrees to terms, authorizes the payment through Shop Pay (Affirm handles their installment processing).
For security, the app texts the customer a 6-digit verification code to complete the process.

What about late fees?

Shop Pay installments don't work like a credit card. There are no fees, penalties, or additional charges to break a payment into installments. It's possible to make early payments through the same checkout page but, unlike credit card payments, they don't charge a fee if you miss a payment. However, you may get restricted or banned from Shop Pay installments if you make a partial or late payment.

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