E-commerce platform Shopify has opened access to Shop Pay Installments, powered through a partnership with BNPL provider Affirm, to offer flexible payments to US customers.
Shopify’s Shop Pay Installments offers customers the option to split a price into four separate payments with no interest or additional fees. Lack of extra charges was an instrumental factor in Shopify selecting Affirm as its exclusive US partner on the rollout.
The Canada-based e-commerce platform’s new payment plan option will be enabled for all customers by default when they switch on Shopify Payments. The rollout comes after Shopify conducted a beta test of the product in 2020 with a select batch of clients and saw 28% fewer abandoned carts than third-party BNPL options had yielded. By May, some 12,500 merchants had tried it out. One-quarter of those merchants also saw 50% higher order values, the company said.
Now, the technology will be made available to more than 430,000 US Shopify merchants which is roughly a quarter of the 1.8 million merchants that use Shopify globally.
Commenting on the new launch, Affirm CEO and founder Max Levchin said, “We have custom-built Shop Pay Installments for Shopify’s merchants and their millions of buyers. As of today, merchants who sign up for Shop Pay will automatically have our powerful product enabled, and merchants who already use Shop Pay can activate Shop Pay Installments in just a few simple clicks.”
The launch follows almost one year after Shopify signed a three-year exclusivity agreement with Affirm to offer its instalment financing plan to Shopify’s merchants. Since that agreement was signed, Affirm completed an initial public offering (IPO) and is now listed on the Nasdaq.
Shopify was one of the beneficiaries of Affirm’s IPO. As of January, when the IPO closed, Shopify owned over 20 million shares of Affirm, worth approximately $2bn.
“Over the past year, [Shopify and Affirm] have been deeply engaged in integrating our systems and technology,” said Levchin. “Together, we have taken a complex technical problem and built a simple, easy-to-use tool to help businesses of all sizes and in many verticals thrive.”
In 2020, Shopify has significantly grown the number of partnerships it has with other large tech firms. The Canadian company has been busy inking deals with social media platforms such as TikTok, Facebook and its subsidiary Instagram, and Google by way of YouTube, to introduce new e-commerce offerings to social media users.
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