Shop Pay: How It Works & Why Merchants Should Enable It

Introduction

Shop Pay is Shopify’s built in one-tap checkout and digital wallet that allows one tap purchases across any Shopify store. This payment solution saves customers’ shipping and billing info to eliminate checkout friction and gets conversion rates up to 50% higher than guest checkout and reduces cart abandonment by 30%.

Given Shopify’s global reach and large merchant base (see our Shopify usage overview by country), enabling Shop Pay can help stores worldwide reduce cart abandonment.

What’s In This Guide

This guide covers Shop Pay’s core features, implementation requirements, installment payment options, security infrastructure and proven performance metrics. We’ll dive into how shop pay’s one tap checkout works, setup for shopify store owners and optimization strategies to increase your average order value.

Who Is This For

This guide is for Shopify store owners, ecommerce managers and online merchants looking to improve checkout conversion rates. Whether you’re experiencing high cart abandonment or want to offer flexible payment options you’ll find actionable tips to increase sales through one tap checkout solutions.

Why This Matters

Cart abandonment costs online retailers billions annually with 70% of shopping carts left incomplete due to checkout friction. Shop Pay is a proven solution to recover lost sales by simplifying the payment process and offering flexible payment plans that increase customer satisfaction and encourage repeat business. In fact Shop Pay can reduce cart abandonment by up to 35%.

What You’ll Learn:

• How shop pay works and its impact on conversion rates

• Step by step setup process for enabling shop pay

• Shop Pay Installments and buy now pay later

• Security and customer data protection

• Performance compared to other payment providers

• Real merchant case studies and results

Understanding Shop Pay and Accelerated Checkout

Shop Pay is Shopify’s express checkout and payment solution that stores customer info to enable one-tap checkout across thousands of Shopify stores. Shop Pay is an accelerated checkout service by Shopify that saves customers’ email, credit card, shipping and billing info. It’s a universal payment wallet so customers don’t have to enter shipping and billing info at different online stores. Additionally, Shop Pay is PCI DSS Level 1 compliant, ensuring high security standards for payment processing.

The accelerated checkout solves a major ecommerce problem: checkout friction kills purchases. Traditional checkout requires customers to navigate multiple form fields, enter credit card info, and verify shipping addresses—steps that create abandonment opportunities. Shop Pay’s accelerated checkout reduces that multi-step process to one tap or click for returning customers and allows customers to complete in two taps.

This matters a lot for modern online shopping behavior, especially mobile commerce where screen real estate and touch interactions create more usability challenges. Studies show customers complete 1.91x more purchases with shop pay vs standard checkout forms. Shop Pay's accelerated checkout process is optimized for mobile users, who complete purchases 1.91 times more often when using Shop Pay compared to standard checkouts.

Shop Pay vs Traditional Checkout

Shop pay performs measurably better than guest checkout options. Shopify’s internal data shows stores using shop pay have conversion rates up to 50% higher than traditional checkout methods. The speed comes from eliminating repetitive data entry—customers authenticate once and checkout with minimal interaction.

This ties into the accelerated checkout concept because saved customer data is a competitive advantage. When customers see the purple shop pay button they expect a faster checkout. That recognition factor builds customer loyalty and encourages repeat purchases across the entire Shop ecosystem.

The Shop Ecosystem Integration

Shop Pay integrates with the Shop app, Shop Cash rewards program and cross platform availability on social media channels and marketing campaigns. The Shop app has over 150 million global users creating a unified customer experience that goes beyond individual store boundaries. Shop Pay can also be integrated with social channels like Instagram and TikTok to extend the checkout experience across multiple platforms. As of 2024, Shop Pay had over 150 million registered users worldwide.

Building on the accelerated checkout foundation this ecosystem approach means customers who use shop pay at one store can use the same streamlined experience at thousands of other Shopify merchants. The Shop app tracks orders, provides real-time delivery updates and allows customers to earn Shop Cash rewards on every purchase so there’s more reason to use it.

Transition: Now that you understand how shop pay works conceptually you can implement it in your shopify store.

Shop Pay Implementation and Setup Process

Shop pay requires specific technical requirements and a simple setup within your Shopify admin. The setup builds on the accelerated checkout concepts by allowing customers to buy with one tap.

Prerequisites and Requirements

To activate shop pay you need to have an active Shopify Payments account as your primary payment provider. Shop pay is currently available for merchants in the US, Canada with UK and Australia to follow in 2025. Your business needs to be located in a supported country and process transactions in supported currencies to enable shop pay.

The Shopify Payments requirement is because shop pay integrates with Shopify’s payment infrastructure to handle data securely and process transactions seamlessly. Third party payment gateways can’t provide the same level of integration for shop pay’s accelerated checkout.

Step-by-Step Setup Process

When to use this: Any Shopify merchant using Shopify Payments can turn on shop pay to reduce cart abandonment and increase conversions.

1. Go to Payments Settings: Log in to your Shopify admin and go to Settings > Payments to access your payment providers.

2. Find Shop Pay: In the Shopify Payments section, find the “Shop Pay” option which should have a toggle.

3. Turn on Shop Pay: Toggle on “Use Shop Pay” to enable the payment method for your online store’s checkout.

4. Configure Button Placement: Optimize shop pay button placement on product pages, cart pages and checkout pages for maximum visibility and usage.

Integration with Third-Party Gateways

Shop Pay requires Shopify Payments as the primary payment processor and can’t be used with third-party payment gateways as the main payment method.

This is because Shop Pay’s security features, data tokenization and accelerated checkout rely on Shopify’s integrated payment infrastructure. Shop Pay uses end-to-end encryption to secure customer data during transactions. To qualify for Shop Pay Installments, customers must be over 18 years old and have a U.S. shipping address.

This explains why Shopify Payments is required—the secure data storage, biometric authentication and cross-store functionality that is shop pay’s value proposition requires Shopify’s controlled payment environment rather than external payment providers.

Transition: Once shop pay is set up, merchants can further enhance the payment experience by turning on installment payments.

Shop Pay Installments and Buy Now, Pay Later Features

Shop Pay Installments adds to the accelerated checkout by offering flexible payment options to increase average order value and make higher priced items more accessible to more customers. This buy now pay later integration works seamlessly within the existing Shop Pay checkout and is offered in partnership with Affirm.

Step-by-Step: Enabling Shop Pay Installments

When to use this: For orders between $50-$17,500 targeting US customers to make higher value products more affordable and increase sales. There are no late fees with Shop Pay Installments so it’s a consumer friendly and transparent payment option that helps customers manage their purchases with ease and confidence.

1. Shopify Payments Settings: Go to your Shopify admin and find the payments section in your store settings.

2. Installment Options: Find the Shop Pay Installments feature which integrates with Affirm’s lending partners in the shopify payments section.

3. Payment Plans: Set up installment payment options: 4 interest free bi-weekly payments or monthly installments up to 24 months with competitive interest rates.

4. Eligibility Requirements: Set customer requirements: minimum age (18+), US address verification and automatic credit approval through Affirm’s lending network.

5. Test Checkout Flow: Complete sample transactions to make sure installment options display correctly and checkout flow works for customers.

Comparison: Bi-weekly vs Monthly Installments

The bi-weekly option is for customers who want short term financing with no interest, while monthly installments are for larger purchases that need longer payment terms. This flexibility allows merchants to capture sales from customers with different financial situations and credit profiles.

Transition: While shop pay is great, merchants often face specific implementation challenges that need targeted solutions. Shop Pay continuously monitors for suspicious activity to prevent unauthorized transactions, ensuring a secure and reliable payment experience for both merchants and customers.

Common Challenges and Solutions

Merchants implementing shop pay sometimes run into technical or adoption related issues that can impact the payment solution. Knowing these common issues helps with troubleshooting and optimization.

Challenge 1: Shop Pay Button Not Showing

Solution: Make sure Shopify Payments is turned on and set as your primary payment processor. Clear your browser cache and wait 5-10 minutes for changes to propagate across Shopify’s servers before trying the checkout again.

If the issue persists, check that your store is in a supported country and currency combination as geographic restrictions can prevent shop pay from being turned on.

Challenge 2: Low Shop Pay Adoption

Solution: Optimize button placement on product pages, shopping cart pages and throughout the checkout process to increase visibility. Promote it in your marketing materials, highlighting faster checkout and interest free payments to encourage customer usage.

Add explanatory text near the shop pay button to build customer confidence in using shop pay as their preferred payment method.

Challenge 3: Customer Confusion About Installments

Solution: Add messaging about installment payment terms, interest rates and eligibility requirements on product pages and checkout pages. Create educational content about how shop pay installments work and the benefits of flexible payment plans.

Include transparent information about monthly payments, down payment requirements if any and how it affects customer’s credit score to build trust and encourage installment usage.

How to enable Shop Pay (step by step)

1. Go to Shopify admin → Settings → Payments

2. Under Shopify Payments click Manage

3. In the Shop Pay section check Enable Shop Pay and save

4. Test the checkout on mobile and desktop; verify the purple Shop Pay button shows on product/cart pages or during checkout

5. If you use a third-party payment provider, follow the “Activate Shop Pay for third-party gateways” path in the Help Center to complete setup. Shopify Help Center+1

Shop Pay vs PayPal Express vs Apple Pay vs Google Pay — Comparison Table

This comparison shows how it stands out as a full checkout solution for Shopify merchants. Simple built-in setup means store owners can turn it on in minutes without any complicated setup, unlike competitors that require more integrations. Competitive transaction fees.

Shop Pay’s massive mobile conversion boost (+72%) proves it’s optimized for mobile shoppers who are a growing segment of ecommerce customers. While PayPal and Apple Pay have larger customer bases, Shop Pay’s integration within the Shopify ecosystem gives you data insights and advanced cart recovery tools which are crucial for reducing abandoned carts and increasing sales.

The buy now, pay later (BNPL) integration through Shop Pay Installments gives you more payment options to increase average order value and customer satisfaction, a feature not available with Apple Pay or Google Pay. Shop Pay’s full analytics integration lets you track performance metrics and make data driven decisions to optimize your checkout faster.

Overall using it gives you a secure checkout experience that not only speeds up transactions but also builds brand loyalty through the Shop app and Shop Cash rewards program. This makes Shop Pay a powerful tool in the competitive ecommerce landscape to maximize revenue while delivering a better customer experience.

Practical approach: Offer multiple express payment options like Shop Pay, Apple Pay, Google Pay and PayPal to cover all user preferences and devices. it often outperforms other accelerated checkout methods on Shopify stores because of its seamless integration, one tap checkouts and flexible payment options.

Conclusion and Next Steps

Shop Pay is a proven solution to reduce cart abandonment, increase conversion rates and customer retention through accelerated checkout experiences. One tap payments, flexible payment options and seamless integration with the Shop ecosystem gives you measurable business benefits as a Shopify merchant. Shop Pay has processed over $15 billion in transactions, it’s one of the most reliable and trusted one click payment solution in the ecommerce industry.

Get started:

1. Enable Shopify Payments if not already set as your primary payment processor

2. Turn on Shop Pay through your payments settings and test the checkout

3. Monitor Performance Metrics including conversion rates, average order value and customer satisfaction scores

4. Optimize Button Placement and promote shop pay in your marketing materials

5. Related: Check out Shopify Payments optimization, mobile checkout and customer retention for more.

More

Setup: Shopify’s Shop Pay help center has technical documentation and troubleshooting for merchants.

Analytics: Track shop pay usage in your Shopify analytics to see adoption and conversion rates.

Customer Education: Create content about shop pay to educate customers and reduce friction.

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