Shop Pay Fees Explained: What Merchants Actually Pay

Shop Pay is Shopify's accelerated checkout — it saves customers' shipping and payment details for one-tap repeat purchases. For most Shopify merchants, the fee question is simple: Shop Pay itself is free to enable and use. If you use Shopify Payments as your processor, Shop Pay adds no additional transaction fees beyond your standard card processing rate. If you use a third-party payment provider, Shopify's standard transaction fees apply regardless.

Here's the complete breakdown of every fee involved when Shop Pay is in the picture — including Shop Pay Installments, Shopify's buy-now-pay-later option.

Is Shop Pay Free?

Yes. Shop Pay has no setup fee, no monthly subscription, and no per-transaction surcharge. Enabling Shop Pay in your Shopify settings costs nothing. The fees merchants pay on Shop Pay orders come entirely from card processing — the same rates that apply to every Shopify Payments transaction.

The only time Shop Pay adds a cost beyond standard processing is if you offer Shop Pay Installments. That program has a separate fee structure, detailed below.

Shop Pay Transaction Fees: The Full Breakdown

If You Use Shopify Payments

When a customer checks out using Shop Pay and you're on Shopify Payments, you pay the standard Shopify Payments card processing rate for your plan. No additional fee for the Shop Pay checkout method. Note that Shopify renamed its mid-tier "Shopify" plan to "Grow" — the rates below reflect current plan names.

If You Use a Third-Party Payment Provider

If you use Stripe, PayPal, or another third-party gateway instead of Shopify Payments, Shopify charges an additional transaction fee on every order — regardless of whether the customer uses Shop Pay or regular checkout:

This fee is charged by Shopify on top of whatever your third-party processor charges. For most merchants processing significant volume, this makes Shopify Payments the more cost-effective choice.

Shop Pay Installments: How Payouts and Fees Work

Shop Pay Installments is Shopify's native buy-now-pay-later option, built directly into Shop Pay checkout. Customers split an eligible purchase into smaller payments; the credit and collections work is handled by Affirm, Shopify's BNPL partner, not by you. From a merchant's standpoint, it settles more like a standard card transaction than a payment plan you have to manage.

Who's Eligible, and What Order Sizes Qualify

Shop Pay Installments is available to merchants in the US, Canada, and UK who are on Shopify Payments with Shop Pay turned on, and it's offered to customers within the following order ranges (including tax, shipping, and discounts):

Within that range, Affirm decides which plans a given customer sees at checkout — typically a short-term, interest-free option billed over a few payments, or a longer monthly plan (up to 12 months) that can carry interest. In the US, APRs on interest-bearing plans can run from 0% to 36%, set by Affirm on a per-customer, per-order basis; Canadian rates are capped lower under provincial regulation. Merchants can't choose which plan types are offered or opt specific products in or out — if an order falls in range and meets policy rules, Installments shows as an option.

The Merchant Fee, and Why It's Higher Than Standard Processing

The Shop Pay Installments fee runs roughly 5–6% per transaction (commonly cited around 5.9% + 30¢), which is meaningfully higher than standard Shopify Payments card rates. That premium reflects the fact that Affirm is absorbing the customer's repayment risk and guaranteeing you full payment regardless of whether the customer completes their installment plan. It's a comparable cost to other BNPL providers like Afterpay or Klarna. One detail worth planning around: if you refund an order paid with Shop Pay Installments, the Installments fee itself is not returned to you, even on a full refund.

Payout Timing and Shipping

Once an order is captured, Affirm pays you the full order amount, minus the Installments fee, usually within 1–3 business days — the same payout speed as a standard Shopify Payments transaction, and independent of how long the customer's own installment schedule runs. Because you're paid in full upfront, you fulfill and ship exactly as you would for any other paid order; you're never waiting on the customer's payment schedule to release goods.

You can track these orders in two places in Shopify admin: filter the orders list by payment method "Shop Pay Installments," or go to Settings > Payments > Shopify Payments > View payouts > Transactions and filter to Installments.

Order Rules, Exclusions, and Disputes

A few operational details matter once Installments orders start coming in:

• Gift cards and subscriptions are excluded. Customers can only use Shop Pay Installments for one-time purchases of physical goods.
• You can't edit the financed amount on an existing order. If pricing or items need to change, the clean path is to refund the order and have the customer place a new one; adding a line item instead generates a separate invoice the customer must pay by another method.
• Disputes go through Affirm. If a customer disputes an Installments order, Affirm will request evidence (tracking, invoices, communication) and typically gives you about 15 days to respond before deciding the case.
• It also works in person. US merchants using Shopify POS can offer Shop Pay Installments for in-store orders, under similar eligibility ranges and pricing as online.

Does Shop Pay Increase Conversion Rate?

Shopify's own data shows Shop Pay has a 1.72x higher checkout completion rate compared to guest checkout. For returning customers who have saved their details with Shop Pay, the one-tap checkout experience removes significant friction. The practical benefit for merchants is that enabling Shop Pay typically increases conversion rate at no additional cost for standard transactions. Shop Pay customers also earn 1% back through Shop Cash, Shopify's cashback program — a built-in incentive that gives them a reason to come back. Offering Shop Pay Installments on top of that tends to help most on higher-priced or multi-item carts, where seeing a smaller per-payment amount at checkout is what gets a hesitant buyer to complete the order.

Shop Pay vs. Other Accelerated Checkouts

How to Enable Shop Pay

Shop Pay is available to any Shopify merchant using Shopify Payments (US, Canada, UK, Australia, and select other markets). To enable it:

1. Go to Settings > Payments in your Shopify admin
2. Under Shopify Payments, click Manage
3. Check the box next to Shop Pay
4. Click Save

Once enabled, Shop Pay appears as a checkout option for eligible customers automatically. Shop Pay Installments has its own activation step and eligibility check, available directly from Settings > Payments > Shop Pay Installments in your admin.

Related: First Pier's Shopify services can help.