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When shopping online, many people look for flexible payment options. Installment payments have become a popular way to buy items and pay for them over time.
Two payment services, Shop Pay and Afterpay, both offer installment options. But are they the same? The answer is no. While they may seem similar, Shop Pay and Afterpay have distinct differences.
In this blog post, we will compare Shop Pay and Afterpay, looking at how they work, their features, and how they differ. By the end, you will understand why these two services are not the same thing, even though they share some similarities.
Is Shop Pay and Afterpay the Same Thing?
In recent years, the “Buy Now, Pay Later” (BNPL) payment model has gained popularity. Customers can split their purchases into smaller, manageable payments. This can make it easier to buy higher-priced items without paying the full amount upfront.
Shop Pay and Afterpay are two of the most widely used services in this category, but they are not identical. They have different goals, availability, and features. This post will answer the question: Is Shop Pay and Afterpay the same thing? by exploring the key differences between the two services.
Shop Pay: What Is It?
Shop Pay is a payment option developed by Shopify in collaboration with Affirm. It was created to streamline the checkout process for Shopify merchants and customers. When you choose Shop Pay at checkout, it allows you to save your payment details and offers the ability to pay in installments for qualifying purchases.
Availability
Shop Pay is only available on Shopify stores. Shopify is an e-commerce platform used by many online retailers to build and manage their stores. If you shop at a Shopify-powered store, you may see the Shop Pay option at checkout. However, it’s exclusive to stores that use Shopify, meaning you won’t find it everywhere.
Focus of Shop Pay
The primary goal of Shop Pay is to make the shopping experience smoother and faster for both merchants and consumers. With Shop Pay, you can save your payment information, making future checkouts faster. Additionally, it allows for installment payments, which makes larger purchases easier to manage.
Installment Options with Shop Pay
Shop Pay Installments are available for orders over $35 USD. You can use it for purchases ranging from as low as $35 to as high as $30,000, including taxes, shipping, and discounts. The installment plan divides the payment into equal installments that can be paid over time.
One key feature is that there are no hidden fees, interest rates, or late fees, which makes it an attractive option for those who want to avoid extra charges.
Credit Check
Shop Pay does not require a credit check. This makes it accessible to more customers, as they do not need to worry about their credit scores when making a purchase.
Integration with Shopify
Shop Pay is natively integrated into the Shopify checkout process. It is automatically available to customers who are shopping on Shopify-powered stores. Because it is part of Shopify’s ecosystem, it provides a seamless experience for both customers and merchants. Retailers using Shopify can easily enable Shop Pay as a payment option.
Afterpay: What Is It?
Afterpay is a third-party BNPL service. It allows customers to pay for items in four interest-free installments or extend the payments to a longer period for higher-cost items. Afterpay has expanded to many retailers, making it a widely available payment option both online and in physical stores.
Availability
Afterpay is not limited to any specific platform. It is available at various online retailers and brick-and-mortar stores. You can use Afterpay at thousands of stores, both large and small. It is not tied to any one e-commerce platform, which makes it more widely available compared to Shop Pay.
Focus of Afterpay
Afterpay’s main goal is to allow consumers to pay for their purchases in installments without paying interest. However, it also offers the option to extend payments for more expensive items, sometimes with added interest.
Installment Options with Afterpay
Afterpay offers two main types of installment options. The most common option is the “pay in four” method, where you pay for your purchase in four equal, interest-free payments every two weeks.
For more expensive items, Afterpay allows you to extend your payments, sometimes for up to a year. However, if you choose to extend the payment plan, you may face interest charges up to 35.99%.
Fees
Afterpay does charge late fees if you miss a payment. The late fee is usually a fixed amount and can vary based on the purchase price. These fees are one of the main differences between Afterpay and Shop Pay, which does not charge late fees.
Credit Check
Like Shop Pay, Afterpay does not require a credit check. This makes it easy for anyone to use the service, regardless of their credit score.
Integration with Retailers
Afterpay must be specifically integrated by each retailer who wishes to offer it. Unlike Shop Pay, which is built into Shopify’s checkout process, Afterpay requires the retailer to actively partner with the service. If a retailer offers Afterpay, you will typically see it as a payment option at checkout.
Key Differences: Shop Pay vs Afterpay
Now that we’ve covered the basic features of both services, let’s compare Shop Pay and Afterpay directly. While both offer installment payment options, they differ in several key areas.
1. Platform Availability
One of the biggest differences is where you can use the services. Shop Pay is only available on Shopify-powered stores, meaning its use is limited to specific retailers who use Shopify’s platform.
On the other hand, Afterpay is much more widespread. It is available at thousands of online and in-store retailers, regardless of which e-commerce platform they use. If you are looking for flexibility in where you shop, Afterpay is likely the better choice.
2. Payment Options and Fees
Both Shop Pay and Afterpay offer installment payments, but Shop Pay does not charge any interest or late fees. You simply divide your payment into equal installments, and there are no hidden costs.
Afterpay, however, offers a “pay in four” interest-free installment plan, but if you extend your payment schedule, you may incur interest charges of up to 35.99%. Additionally, Afterpay charges late fees if you miss a payment, while Shop Pay does not.
3. Credit Check
Both services do not require a credit check, which makes them accessible to a broad range of customers. This feature is a significant advantage for consumers who want to avoid the hassle of a credit check when using installment payment options.
4. Integration
Shop Pay is integrated natively into the Shopify checkout process, making it very easy for Shopify merchants to offer the service. Afterpay, however, requires retailers to actively partner with the service.
This means that Afterpay’s availability depends on the individual retailer’s decision to integrate it, which may limit its use compared to Shop Pay in certain situations.
Frequently Asked Questions
Here are some of the related questions people also ask:
What is the difference between Shop Pay and Afterpay?
Shop Pay is a payment option exclusive to Shopify merchants, allowing users to pay in installments without any interest or late fees. Afterpay, on the other hand, is available at a wide range of retailers, offering interest-free payments in four installments or longer-term options with interest charges and late fees.
Can I use Shop Pay at any online store?
No, Shop Pay is only available on Shopify-powered stores. If the store uses Shopify as its platform, you will see the option to pay with Shop Pay at checkout.
Does Afterpay charge interest?
Afterpay offers interest-free payments when you split your purchase into four installments. However, if you extend the payment period beyond the standard four installments, you may incur interest charges of up to 35.99%.
Is there a credit check when using Shop Pay or Afterpay?
No, neither Shop Pay nor Afterpay requires a credit check. Both services are available to consumers regardless of their credit score.
Are late fees charged by Shop Pay?
No, Shop Pay does not charge any late fees. If you miss a payment, there are no additional charges.
Can I use Afterpay at any store?
Afterpay is available at a wide variety of retailers, both online and in-store. However, retailers must actively partner with Afterpay to offer the service, so it’s not available everywhere.
Is Shop Pay only for large purchases?
No, Shop Pay can be used for purchases starting at $35 USD. It is available for a wide range of products, including both small and large purchases, as long as they meet the minimum order requirement.
What happens if I miss an Afterpay payment?
If you miss a payment with Afterpay, you may incur a late fee. The late fee is typically a fixed amount, depending on your purchase price, and it can increase if payments continue to be missed.
Can I use Afterpay for in-store purchases?
Yes, Afterpay is available for in-store purchases at participating retailers. You can use it both online and at physical locations where Afterpay is accepted.
The Bottom Line
In summary, the question “Is Shop Pay and Afterpay the same thing?” can be answered with a clear “no.” While both services allow for installment payments, they are distinct in several important ways.
Shop Pay is exclusive to Shopify merchants and offers an interest-free, fee-free experience with a simple, integrated checkout process. Afterpay, on the other hand, is a broader service available at many retailers and offers flexible payment plans, but it may include late fees and interest charges for longer payment terms.
Both Shop Pay and Afterpay can be great options for consumers looking to manage their purchases over time, but understanding the differences will help you choose the right one based on your shopping habits and needs.
Whether you are a frequent Shopify shopper or someone who enjoys shopping across multiple online platforms, these two services offer flexible payment options that cater to different needs.