Let's face it, eCommerce is the new way to shop in 2022. It's easy, convenient, and far more relaxing for those of us leaning towards the introvert side of things.
With this growth in online shopping, comes a market for apps that help provide customers access to all the same benefits such as organized product catalogs, easy search functions (hello virtual sales assistants), and of course flexible payment options.
Just like brick-and-mortar stores, you want to be able to offer customers a choice of paying upfront or paying in installments. That's why Afterpay is becoming one of the most popular payment options for online merchants.
Let's take a look at what it is, how it can increase your sales, and how to add it to your Shopify store.
Afterpay is a payment solution that conveniently allows your customers the flexibility to "buy now, pay later".
What makes this payment solution so enticing is that it offers customers the option to purchase a product from your site and pay it off in four installments over a six-week period. And, just like an upfront payment, it is totally interest-free if paid within 4 weeks! They can even send reminders to help cap late payments and encourage customers to pay on time.
The app was founded in 2014 in Australia and has since gained millions of global customers and hundreds of thousands of merchant partners across Australia, New Zealand, the US, Canada, and the EU (where it is called Clearpay).
As a Shopify online store owner, you can integrate Afterpay into the checkout process as one of your payment offerings and decrease cart abandonment while increasing the average cart price.
quote: Afterpay has around 19M active global customers and sends merchants around 1M daily global referrals from their shop directory.
It's also more than just a payment gateway; Afterpay also offers retailer marketing resources such as banners, marketing tips, insights, free downloadables, etc. that help you grow your business.
There are numerous positives to using the Afterpay Shopify app. Here are a few of the proven benefits:
- Up conversion rates as your customers can get what they need or want without having to pay upfront in full - perfect for those on a tighter budget or for more expensive items!
- Retain customers with Afterpay's cost-free interest rate with an additional cap on any late fees so active customers won't ever spend more on fees than the cost of their purchased product.
- See an increase in revenue and average order value with a minimum purchase amount introduced before your customers can utilize Afterpay.
- Boost purchase frequency - Shoppers who use Afterpay shop twice as much as those who do not.
- Lower payment risks as you receive the full amount for every Afterpay purchase while your customers enjoy a more affordable shopping experience.
- Reduce fraudulent transaction risks associated with credit cards.
- Keep ahead of your competitors by integrating one of the most popular payment methods within the clothing sector.
- Access more sales channels by being listed as a merchant on the Afterpay retailer list.
Afterpay is not only popular for its many benefits, but also for the fact that there are no fixed monthly charges or setup fees. You will be paid in full at the time of the purchase, minus a processing fee on the total order.
The basic cost breakdown for merchants and customers is as follows:
- Merchants: in-person and online purchases will cost you 6% plus 30 cents per transaction.
- Customers: the loan is interest-free with a 25% payment upfront and a flexible installment plan of 25% paid every two weeks until the loan is paid in full.
Customers are provided a small spending limit to start (approximately $500) and the limit gradually increases over time based on how you use it and with on-time payments.
If customers pay late they will be charged a $10 late fee plus an additional $7 if the payment is not current after seven days. However, late fees are capped at 25% of the original purchase amount so your customers won't end up paying more in fees than for the item they actually bought.
Adding the Shopify Afterpay app is painless and can be done via the payment settings on your Shopify store.
To add the app to your online store, follow the simple guide below...
Click on 'Settings' and 'Add new payment methods'. You will see a list of payment providers that you have already added to your store.
In the search bar, search for 'Afterpay' and then click 'Activate'.
Next, Click 'Connect' and a new tab will open where you can choose to install the Shopify Afterpay app.
In the same tab, you'll be redirected to a page where you will fill in some basic information. Before filling this in, you would have to complete the Afterpay merchant account setup as part of the registration process.
If you have already registered with them, you can select the country of your Afterpay account and verify your identity with your email or Merchant credentials:
- Sign in with the email you used to complete the merchant application. A verification code will be emailed to you to confirm your identity.
- Click 'Activate with Merchant ID & Secret Key' to connect your Afterpay account with your API credentials, issued to you when you completed onboarding.
Once redirected back to your Shopify payment settings, click 'Activate Afterpay (New)'.
Do Not Enable Test Mode: Do not check this, the integration will not work. The ‘Enable test mode’ checkbox/function is only applicable for dedicated test websites. Advise your Afterpay Account Manager should test credentials be required.
Once you have completed the above steps, Afterpay will show up alongside the rest of your installed payment solutions.
Once you have completed the Shopify Afterpay setup, you may have one or two lingering questions. We rounded up some of the most commonly asked questions and answered them for you below.
How Do I Add Afterpay To My Product Pages?
To add the Afterpay icon and payment option to your product pages, you'll need to add a bit of code to your theme.
To do this, you'll need to navigate to your theme by clicking on Online Store → Themes → Customize theme.
Click on ellipses at the top left of the screen and choose 'edit code'.
Under the ‘Layout’ folder, click on 'theme.liquid'.
Scroll to the bottom of the theme.liquid file and paste the liquid code snippet right at the bottom below '</html>'.
Click 'Save' and navigate to the website to review the product pages and make sure that the Afterpay badge is displayed.
How Do I Request An Afterpay Banner?
If you'd like to have a customizable Afterpay banner for your store, you can fill in the banner request form via their website.
Why Can't I See Afterpay In My Express Checkout?
Navigate to your Shopify store payment methods and ensure that you have correctly installed and set up the app. If Afterpay is visible on your installed payment providers list after following the steps required, please contact your Afterpay Delivery Manager.
Why Is Afterpay Not Working On Shopify?
If you allow customers to check out with either their phone number or email address, they may receive a message that says, "Your payment can’t be processed for technical reasons. Please try a different payment method."
To fix this error, go to your Shopify settings and make sure that you have ticked that customers can only check out using their email address and not phone number OR email address.
Another possibility is that you have selected Shopify's manual capture setting. This is a store-wide setting so if it has been enabled for another payment method then it will be enabled for all new payment gateways.
If you have enabled “manually capture payment for orders” within your Shopify payment settings, Afterpay will not automatically capture orders when the shopper completes the checkout.
How Do I Process A Refund Order With Afterpay?
Any Afterpay orders can be refunded from Shopify and will automatically be sent to Afterpay.
If you're looking to offer your customers more flexible payment options then Afterpay is a fantastic and popular payment method to integrate into your Shopify store. It decreases any credit risks, increases revenue, average shopping cart value, and cart conversions, leads to more successful sales, and doesn't cost the earth to use!
For your customers, it's a convenient alternative to credit that means better access to high-priced items and eases their purchase decisions by offering interest-free installment financing.
As an added bonus, you'll also have access to valuable data such as daily settlement reports and your store's overall Afterpay performance while being able to utilize Afterpay marketing best practice resources via their retailer resources.
We're convinced that this may be one of the best alternative payment methods for any Shopify store (and no, we're not even getting paid to say that!). Give it a go and find out for yourself!