Max Levchin, Affirm CEO and founder, said in a blog post on Thursday (June 10) that 25 percent of merchants using Shop Pay Installments during its early access period reaped 50 percent more orders compared to other payment types.
Shop Pay Installments allows merchants to give buyers a flexible way to pay for the goods they want. Unlike typical buy now, pay later (BNPL) plans, Shopify’s solution doesn’t require users to pivot to a different site to complete their purchase. Merchants report 28 percent fewer abandoned carts using Shop Pay Installments after using another BNPL solution.
“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,” Levchin said in the post.
A recent report from PYMNTS showed that 32 percent of respondents who are having trouble meeting monthly expenses used BNPL solutions for their Black Friday transactions in November 2020. Other research indicated that 48 percent of consumers who prefer to use some form of credit at the point of sale (POS) won’t do business with merchants that don’t offer it.
Affirm said in a February earnings call — its first as a public entity — that it now has over 4.5 million users.
Shopify teamed with Affirm in July 2020 to power its Shop Pay Installment plan. Affirm said that merchants using its BNPL product see a boost in average order size as well as overall sales.