Shop Pay Installments is a flexible payment option that allows customers to split the cost of their purchases into manageable payments, making it easier for them to afford higher-priced items while boosting conversion rates and average order values for merchants. Here’s an overview of how Shop Pay Installments works and what it offers to both customers and merchants:

 

Eligibility Requirements

For Merchants:
- Must be based in the United States and sell in USD.
- Need to have both Shopify Payments and Shop Pay activated on their Shopify store.

For Customers:
- Must have a billing address in the United States.
- Need to be signed up for Shop Pay.
- The total order amount must be between $50 to $20,000.

 

Payment Options

Customers shopping at stores offering Shop Pay Installments can choose between:

Biweekly, Interest-Free Payments: For orders ranging from $50 to $999.99, customers can make four equal payments every two weeks, without any interest.

Monthly Payments: For orders between $150 and $20,000, customers can opt for monthly installment payments. These orders are interest-bearing with APRs ranging from 10% to 36%, depending on the terms, which can be three, six, or twelve months.

Benefits for Merchants

• Increased Conversion Rates and Average Order Values: By offering a flexible payment option, merchants can appeal to customers who prefer not to pay the full price upfront, potentially increasing both the number of completed purchases and the size of those purchases.

• No Additional Risk or Cost: Merchants receive the full payment upfront minus the usual fees, while the financial institution partnering with Shop Pay handles the installment payments. There's no additional risk to the merchant if the customer chooses to pay in installments.

• Premium Installment Options: Some merchants may be eligible for premium installment options, such as 0% monthly financing and longer terms, further enhancing the attractiveness of their offerings to customers.

 

Customer Experience

Transparent Pricing: When customers view products or reach the checkout, they can see calculated installment amounts, enabling them to understand the financial commitment before making a purchase.

Easy Access to Information: Detailed information about how Shop Pay Installments works, including compliance and regulatory details, is readily available, helping customers make informed decisions.

 

Implementation

Implementing Shop Pay Installments can be a strategic move to make your products more accessible to a broader audience. To get started, ensure you meet the eligibility requirements, and then activate Shop Pay as part of your Shopify Payments setup. Promoting the availability of installment payments through your marketing channels can also help maximize awareness and uptake among your customer base.

Shop Pay Installments not only enhances the shopping experience by offering financial flexibility but also aligns with merchants' goals of increasing sales and growing their business without adding complexity to their operations.