Does Shopify Shop Pay – Make Shopify Payments Worth Using?

6 Min. Read

In a nut shell, Shop pay is about streamlining the Shopify checkout and payment process, now you might think here that accelerated checkouts are nothing new, and you would be right. Anyone familiar with conversion rate optimization has looked at optimizing their checkout process, but optimizing payment processing is something else, another important process that can really improve your Shopify conversion rate.

It’s not easy to optimize your payment process or change payment service provider (PSP) and in many cases you can not.  The problem for merchants/retailers is that Payment service providers are not known for making their payment process configurable, – forcing the standard model upon all.  

Even if you can switch PSP, choosing which payment services provider to switch to is not easy either, it involves more than just checkout speed, it takes a lot of time and requires research to find the best fit for your business.

Making the decision even more difficult is the fact that successful innovation tends to be adopted (copied) across the entire payment services industry, – eventually, and so the question arises, is it really worth the effort to change provider now? – chasing innovation that is likely to come to your existing PSP provider in 6 months anyway?

Ultimately the question for Shopify merchants is, does the advantages of Shop pay – pay off, justifying the higher fees of Shopify payments?

Or are there better alternatives?

Currently Shopify payments is only available in a handful of countries and so Shop Pay is only available in some of those same countries.

In addition Shopify must be configured in English as the default language.

So, I have already ruled out many of you reading this, but keep reading because I have provided information below about how to choose a PSP if you can’t use Shop Pay.  

Table of Contents

What is Shopify Payments?

Shopify Payments” is a streamlined payment process, that simplifies the administration of payments.  It enables merchants to deal with just one payment service provider instead of the traditional many provider option. With Shopify Payments, merchants can automatically accept all major payment methods.

shopify-payment

What is Shop Pay?​

Shopify Shop Pay is the other half of the optimal Shopify checkout process, the customer facing part that you would be interested in for improving conversion rates.

By design, its not something you can achieve on your own, because it is a Shopify network feature, and you probably would not even consider it otherwise because of ensuring data regulations and GDPR compliance.  This feature is a real benefit for Shopify, because it is an optimization only available on the Shopify network of stores and therefore a true USP.

What are the benefits of Shopify Shop Pay?

Let’s look at the claims of Shopify for their Shop Pay product.

  1. Shopify increases checkout speed by 3x-4x
  2. In a study of Shop Pay vs Shopify’s regular offering the checkout to order rate was 1.72x times higher.
    1. Deskop Shopify Shop Pay converted 1.56x higher vs standard
    2. On mobile devices Shop Pay converted 1.91x higher.
  3. Makes it easier to sell to customers of other Shopify store, including your competitors.
  4. By adopting a frictionless shopping system today you are preparing for tomorrow. The availability of improved systems and service builds trust and brand loyalty, and ultimately makes it a future expectation of customers.

The outcome is of course a greatly accelerated checkout, shortening checkout times and increasing conversion by preventing/reducing the dithering time when customers often change their minds about a purchase.

What are the limitations of Shopify Shop Pay?

  1. Shopify Payments must be used, but ………
  2. Not all countries in which Shopify operates in are supported, check out Shopify Payments requirements for more information. Surprisingly Shopify payments is not available in US territories, except Puerto Rico!
  3. Your default language must be English
  4. You will need to deactivate customer accounts feature of Shopify.

How to activate Shopify Shop Pay?

Admin > Settings > Checkout > Shopify Pay – Enable.  Once activated you will see it listed in the payment options as shown below.

shop-pay

How to Choose a Payment Services Provider (PSP)

The saying “the devil is in the detail” is all too true in relation to PSP’s.  The great thing about Shopify is that there are so many different PSP providers to choose from, because in most cases they are needed.  Shopify Payments is unavailable in most countries and therefore provides a range of options (100+ at the time of writing) for most countries in which they operate.  So how should you choose between them?

  1. Avoid multiple Merchant accounts – Some PSP’s require you to have a merchant bank account in the country they operate in and these can be expensive.
  2. A question of Currency. Do they support the currencies you need?
  3. ***FEES*** per transaction volumes or/and monthly fees? Setup fees/administration feeds.
  4. Transaction volumes. If yours are high you can negotiate a better rate than what is publicised.
  5. Recurring payments, nothings better than an ongoing payment payment services model, but does the PSP support it?
  6. Where are your customers? If your website is in specifc languages then most of your customers are likely to come from regions where those languages are used.  Select providers from among those.
  7. Payment types, new types of payment are constantly being added, check to see if those under consideration currently support the latest ones, if they don’t then they are slow to respond to market changes. Make sure that the PSPs in question hold the certifications and accreditations required.
  8. Security wins customer trust, thus being able to promote the fact that your PSP has the highest PCI DSS standards is definate plus, add their trust seals to your website.
  9. Select a PSP that understands your market segment and provides a ranges of services that meet your needs, not just for today but for tomorrow. For example, omni-channel transaction processing with a clear upgrade to POS path if needed.
  10. Where possible go for PSPs that are independent of the large acquirers, because this will provide you flexibility, pricing and there is usually room for negotiation when contracting.

Conclusion

If you have Shopify Payments, then the convenience of only dealing with one PSP provider is valuable. There are cheaper alternatives out there but not necessarily, if you were to factor in the cost of time and effort of dealing with them.  Shopify Shop Pay is an add on feature that makes Shopify Payments even more valuable, thus appealing to more merchants.

Will it make you more money?  Well that’s a question of sales volume.  When used with other Shopify apps to improve conversion then its value becomes greater still in what can only be described as a multiplier effect.  Every improvement of conversion rate increases the value of advertising expenditure to drive traffic, thus making your campaigns more cost-effective and profitable.

Therefore it is prudent to make sure you have:-

  1. A high converting theme design
  2. A content strategy that is personalized (greatly increases conversion rate)
  3. A targeting application like OptiMonk
  4. Carry out Behavioral segmentation, possible with customer analysis data obtained through Shopify Google Analytics via Conversific.com
  5. ) + data and targeting through conversion rate optimization (OptiMonk).
shop pay

The use of Shopify Payments and Shop Pay certainly provides an advantage over those that do not, or or just can not, just as countries with low transaction fees have an advantage over countries with higher transaction fees when selling internationally.  Its not just one thing that leads to ecommerce success, but rather the whole ecosystem of operation.

Therefore, if you want to upscale your store you need to first reduce the risks of doing so, by streamlining your store and cutting costs like transaction fees and by increasing conversion by using Conversific to better understand your customers, enabling the creating of more narrowly defined personas, and a tool like OptiMonk to retarget them on site.  Its only when this is done that money is worth spending on PPC advertising + retargeting.

Note that countries with Shopify payments also tend to have lower transaction fees than those who don’t, and so this article raises an interesting question of where to run your Shopify store from (we’ll look at this in a future article).

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