Shopify guideGuide7 min read
How to Set Up Buy Now, Pay Later on Shopify
Buy now, pay later helps when price is the hesitation. Here is how to set up Shop Pay Installments and Afterpay on a US Shopify store, how the money works, and where to show the installment price.
Key takeaways
- For US stores, Shopify's built-in buy now, pay later option is Shop Pay Installments, powered by Affirm. It needs Shopify Payments and Shop Pay, and you switch it on in
Settings > Payments > Manage. - You're paid the full order amount, minus the Shop Pay Installments fee, in your normal Shopify Payments payout. Affirm collects from the shopper, so you aren't liable if they stop paying.
- Afterpay and other providers connect as third-party payment apps. Shopify's third-party transaction fee of 2%, 1%, 0.6% or 0.2% applies to those orders.
- Pay-later options earn their place on orders above about $50. Below that, they mostly add another logo to the checkout.
- Who it is for
- US store owners with orders above about $50
- Time needed
- 15 minutes for Shop Pay Installments
- What you need
- Shopify Payments, Shop Pay and selling in US currency
Buy now, pay later works best when the price is the hesitation. A shopper looking at a $400 jacket might wait for payday. Offer four payments of $100 and the decision can happen today. On a $15 phone case the same option barely registers.
That's the frame for this guide. I'll show you which pay-later options a US Shopify store can use, how to set up each one, how the money and the risk work, and where to show the installment price so it helps rather than clutters. Settings, limits and rules come from Shopify's Help Center and Afterpay's developer documentation, as checked on 7 November 2026.
Buy now, pay later options for Shopify
| Option | Store countries | How it's added | Shopify transaction fee |
|---|---|---|---|
| Shop Pay Installments | US, Canada, UK, Australia (early access) | Shopify Payments setting | – |
| Klarna via Shopify Payments | UK and European countries | Shopify Payments setting | – |
| Afterpay | US app needs US currency and shipping | Third-party payment app | 2% to 0.2% |
| Other BNPL providers | Varies by provider | Third-party payment app | 2% to 0.2% |
For a US store, that means Shop Pay Installments is the default choice, and Afterpay is the main alternative when your shoppers already use it. Klarna through Shopify Payments isn't listed as a payment method for US-based stores, and Klarna's own Shopify app is limited to merchants with a direct Klarna agreement.
How Shop Pay Installments works
Shop Pay Installments lets shoppers split an order into payments at checkout, using their Shop Pay account. Affirm runs the lending and the collections. For US shoppers, the plans depend on the order value:
| Plan | Order value | Interest |
|---|---|---|
| 2 payments every 2 weeks | $35 to $50 | Interest-free |
| 4 payments every 2 weeks | $50 to $999.99 | Interest-free |
| Monthly payments | $150 to $30,000 | 0% to 36% APR |
Orders above $20,000 need a down payment. The shopper's billing address, shipping address, card and account must all be in the US, and checkout must be in US currency. Capital One and Chase credit cards aren't accepted for Shop Pay Installments.
For you, the money works simply. You receive the full order amount, minus the Shop Pay Installments fee, 1 to 3 business days after the payment is captured, bundled with your regular Shopify Payments payout. The fee is higher than your standard card rate because it includes it. Shopify doesn't publish one figure for every store, so check yours under Settings > Payments, then Manage, Manage payment methods and View payment rates.
How to set up Shop Pay Installments
- Check you're eligible. You need an active Shopify Payments account selling and paying out in US currency, Shop Pay switched on, a live store that isn't password-protected, English as the primary store language and a business that isn't primarily B2B. Affirm also excludes some categories, such as gambling, financial services and regulated products.
- Open the settings. Go to
Settings > Paymentsand clickManagein the Shopify Payments section. - Turn it on. In the
Shop Paysection, switch on Shop Pay Installments and save. - Check premium options. Under Shop Pay Installments, click
Manageto see if you qualify for premium options, such as 0% monthly financing and longer terms. Eligibility depends on your store's average order value. - Check the product page. Shopify shows the calculated installment amount on product pages, with a link to more details. Open a product over $50 and confirm it displays under the price.
- Test at checkout. Go to checkout with an eligible order and confirm the Shop Pay Installments option appears.
If the option doesn't appear in the Shop Pay section at all, go back to step 1. A store still in onboarding review can also be blocked by a payout hold.
How to set up Afterpay on a US store
Afterpay connects through its own payment app and Afterpay Business Hub account. You need an approved Afterpay merchant account before you start. For the US app, your business address must be in Australia, Canada, Hong Kong SAR, New Zealand, the UK or the US, and you must ship to the US and sell in US currency.
- Install the app. Use the install link from Afterpay's Shopify guide, which opens your Shopify payment settings. On the
Install appscreen, clickInstall. - Connect Business Hub. You're sent to Afterpay Business Hub. Log in, choose the merchant account that matches your store and click
Connect. - Activate. Back in Shopify, leave
Test modeoff and clickActivate. Afterpay warns that turning test mode on makes the integration fail. - Check the payment capture setting. Afterpay's guide asks for
Automatically at checkoutorAutomatically when order is fulfilledunderSettings > Payments. If you capture manually, follow Afterpay's manual capture instructions. - Confirm at checkout. Visit your store and check Afterpay appears as a payment option.
Afterpay is a third-party method, so Shopify's transaction fee applies to Afterpay orders on top of Afterpay's own merchant fee. On the Basic plan that's 2% of every Afterpay sale. Factor that in before you decide. If you sell in Australia, my guide to setting up Afterpay on Shopify in Australia covers the local app.
Which pay-later option to add
- 1
Is your average order above about $50?
Yes: next questionNo: skip pay later for now
- 2
Do you use Shopify Payments and meet the eligibility rules?
Yes: start with Shop Pay InstallmentsNo: consider Afterpay or another provider
- 3
Do your shoppers already ask for a specific brand, such as Afterpay?
Yes: add it alongside, and budget for the transaction feeNo: one pay-later option is enough
Two pay-later options rarely sell more than one. Pick the one your shoppers know and show it well.
Show the installment price where it helps
A pay-later option nobody sees until the payment step does very little. The decision happens on the product page, so that's where the installment price belongs.
- Product page, under the price. "Or 4 payments of $25" next to a $100 price answers the cost question at the moment it comes up. Shop Pay Installments does this for you. Afterpay offers its free On-Site Messaging app for product and cart pages.
- Cart page. A reminder near the total helps shoppers whose cart has grown past what they planned.
- Not everywhere. Banners on every collection card and the header add noise. Keep it to the product page and cart.
Measure the effect rather than assuming it. I check conversion rate and average order value for the products above $50 before and after, which is part of my CRO service, starting from $500.
Refunds and disputes
Refunds on Shop Pay Installments orders run through Shopify Payments like any other refund and come out of your next payout. Affirm adjusts the shopper's plan. If a shopper disputes a transaction with Affirm, you're notified in the admin and by email and respond through the same process as a Shopify Payments dispute.
For Afterpay, refunds and disputes follow Afterpay's own merchant terms rather than Shopify's dispute process, so read your agreement before your first refund. My guide on preventing chargebacks covers the habits that reduce disputes across every payment method.
By country: pay later outside the US
| Store based in | Built-in option | Common third-party option |
|---|---|---|
| United Kingdom | Klarna, Shop Pay Installments | Clearpay |
| Netherlands | Klarna | Other European providers |
| Australia | Shop Pay Installments (early access) | Afterpay |
UK Shop Pay Installments offers three interest-free payments from £50 to £999.99, and Australian stores pay 10% GST on the Shop Pay Installments fee.
Common mistakes
- Adding pay later to a low-price store. If most orders are under $35, Shop Pay Installments won't even show.
- Forgetting the transaction fee on third-party BNPL. Afterpay on the Basic plan costs Afterpay's fee plus 2%.
- Hiding the option until payment. The installment price works on the product page, not at the last step.
- Running several pay-later brands. More logos, more reconciliation, rarely more sales.
- Testing Afterpay in test mode. Afterpay says it breaks the integration on a live store.
- A non-English primary language. Shop Pay Installments requires English as the primary store language.
Buy now, pay later checklist
- Average order value checked against the plan ranges.
- Shopify Payments and Shop Pay active.
- Shop Pay Installments switched on and premium options checked.
- Your Shop Pay Installments rate noted from View payment rates.
- Installment price visible under the product price.
- Third-party BNPL app, if used, installed, connected and activated with test mode off.
- Transaction fee included in your margin sums for third-party BNPL orders.
- Test order placed with each pay-later option.
Next steps
Start with Shop Pay Installments if you're eligible. It takes five minutes and needs no extra account. Run the numbers on your margin with the profit margin calculator, and if you're choosing between brands, the Afterpay vs Klarna comparison covers the differences. For a second opinion on your checkout, send me your store for a free review.
Free tools
Check your own store
Free, no sign-up. Each one runs a part of this guide for you.
Frequently asked questions
Does Shopify have buy now, pay later?
Yes. Shop Pay Installments is Shopify's built-in option, powered by Affirm, for eligible stores in the US, Canada, the UK and Australia (early access). It needs Shopify Payments and Shop Pay, and you turn it on in Settings > Payments > Manage.
How much does Shop Pay Installments cost merchants?
Activation is free. Each transaction carries a higher fee than a standard Shopify Payments card payment, because the fee includes the normal processing rate. Shopify shows your exact rate under Settings > Payments > Manage > Manage payment methods > View payment rates.
When do I get paid for Shop Pay Installments orders?
You receive the full amount, minus the fee, 1 to 3 business days after the payment is captured, as part of your normal Shopify Payments payout. Affirm collects the installments from the shopper, so you aren't liable if they stop paying.
Can I add Afterpay to a US Shopify store?
Yes, with an approved Afterpay merchant account. Install the Afterpay US payment app, connect your Business Hub account and activate it with test mode off. Your store must sell in US currency and ship to the US, and Shopify's third-party transaction fee applies to Afterpay orders.
Can US Shopify stores use Klarna?
Shopify's US payment methods page doesn't list Klarna as a Shopify Payments method. Klarna's own Shopify app is available to merchants with a direct Klarna agreement, so US stores usually start with Shop Pay Installments instead.
What is the minimum order for Shop Pay Installments?
In the US, the smallest plan covers orders from $35 to $50 in two payments. Four interest-free payments cover $50 to $999.99, and monthly plans cover $150 to $30,000.
Sources
- Shop Pay Installments eligibility, Shopify Help Center
- Activating Shop Pay Installments, Shopify Help Center
- Shop Pay Installments customer experience, Shopify Help Center
- Getting paid with Shop Pay Installments, Shopify Help Center
- Add Cash App Afterpay at checkout (Shopify), Cash App Afterpay Developers
- Third-party payment providers, Shopify Help Center
Related services and work
I'm a Shopify developer and CRO specialist. I have built and improved Shopify stores since 2018, completed more than 1,000 projects, and hold a 4.96 average rating across 719 client reviews.
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