In a battle to win over larger enterprise retailers, Shopify’s Shop Pay is now available for use off Shopify

Enterprise retailers who don’t use Shopify to build and manage their online stores can now integrate the platform’s popular one-click checkout solution, Shop Pay, on their e-commerce websites.

Putting the spotlight on Shop Pay

Introduced in 2017, Shop Pay provides merchants with a smoother checkout experience for their customers by allowing them to save their payment information like shipping and billing preferences within Shopify. By doing so, consumers can circumvent entering data every time they make a new purchase, leading to a 4 times faster checkout than a guest checkout or manually filling a checkout form.

[Image Source: Shopify]

According to recent research, Shop Pay increases the number of website visitors who turn into paying customers by up to 50%. Shop Pay also offers customers the choice to pay in full at checkout, or Pay in 4 enabled by Affirm – both online and in-store if certain conditions are met.

Checkout design is now a key point in online purchases and explains why merchants who integrate payments into their platforms or apps are driving smoother checkout experiences and less cart abandonment. Moreover, checkout and payments experiences are closely tied to revenue and impact customers’ current and future buying decisions, building or breaking their affinity with the brand. 

The new update green lights Shop Pay to perform the same function of automatically inserting user data at checkout for supported third-party websites outside the Shopify ecosystem — after a customer has saved their information for the first time. Consequently, buyers only need to enter a one-time password to complete transactions.

Previously, outside of Shopify’s network, Shop Pay was only available as a payment method for in-app checkout on Facebook and Instagram.

Commerce Components by Shopify [Image Source: Shopify]

Shopify offers the Shop Pay service through its Commerce Components stack, which the company launched earlier this year. Enterprise brands can handpick components from a set of tools they want to employ and integrate into their existing websites to improve user experience. These features are designed to help a storefront with order management, discounts, chat, and support elements, among other things.

“Allowing enterprise retailers to use Shop Pay as a commerce component continues to build on this approach, enabling the biggest brands to benefit from Shop Pay’s industry leading conversion,” said Kaz Nejatian, COO at Shopify.

Need for speed: Jostling to draw in larger retailers

2.8 million online stores in the US use Shopify as their e-commerce platform.

[Image Source: OBERLO, Data Source: BuiltWith]

The new move enables Shopify to further expand its target market and serve larger retailers targeted by Shopify’s rivals, like WooCommerce, BigCommerce, and others. Offering Shop Pay as a standalone component provides more options for larger retailers to embed Shop Pay into their own websites. The new standalone checkout service means merchants can adopt Shop Pay without having to shift their entire commerce stack onto Shopify’s cloud platform. 

“It’s a win-win for large retailers because they don’t need to waste time, engineering power, and money building critical foundations Shopify has already perfected. And they don’t have to rip and replace all of their existing commerce infrastructure to get the latest and greatest features,” explained Nejatian.

The wide accessibility of Shop Pay beyond businesses using Shopify can also constitute a challenge to other platform built-in payment mechanisms in the US like digital wallet providers Apple Pay, Amazon Pay, Venmo, and PayPal. With a market share of just over 50% in the online payment processing area, PayPal has been a more widely accepted option that can be used with most e-commerce platforms. Rivals like Amazon Pay also face competition when it comes to PayPal because of its wide adoption and broad customer base. To keep up with the competition, Amazon recently partnered with Citi Flex Pay for its digital wallet. Eligible Citi card members can choose to pay over time during checkouts at e-commerce stores that offer Amazon Pay.

As far as the checkout experience is concerned, PayPal redirects customers to their website to complete the payment. This can create a stumbling block in creating a smoother checkout experience, which may decrease a merchant’s overall conversion rate because of the additional step. 

On the other hand, Shopify is betting lower transaction fees, a faster payout schedule, integrations, and checkout services will contribute to growing traction with larger merchants. To entice shoppers, the e-commerce platform also rolled out a new rewards program for the US users of Shop Pay prior to making the service available for external websites. The new program gives customers 1% back in rewards on eligible purchases that can be redeemed on the company’s Shop app.

Shopify also unveiled plans to expand its partnership with Adyen, a payment processing platform for online retailers. The integration planned to roll out later this year will enable enterprise merchants on Shopify to accept a broad range of payment methods across global markets. These payment methods include credit cards, digital wallets, and local options, like iDEAL, a popular e-commerce payment platform in the Netherlands, and Cartes Bancaires in France.