What: Shopify embraces “Buy Now Pay Later” with Shop Pay Instalments, a custom-made solution powered by Affirm.

Why is it important: Even the smallest business can now offer BNPL solutions to customers.

Affirm built the Shop Pay Instalment solution to be integrated onto Shopify’s Shop Pay platform, which already offers various services to merchants to measure their sales and monitor their operations. It’s also a move by Affirm to gain market share over competitors such as Klarna and Afterpay.

The partnership with Shopify means that hundreds of thousands of additional merchants in the U.S. will provide Affirm’s alternative payment solution to shoppers. Any U.S. merchant newly listing on Shopify is automatically enabled with Shop Pay Instalments.

Affirm officials said that one in four merchants using Shop Pay Instalments during the beta period saw higher sales, some by as much as 50%; that on average, merchants saw 28% fewer abandoned carts and higher transaction values, and that their payment system is faster for consumers since they don’t have to fumble with credit cards.

Affirm hasn’t seen an increase in delinquent payments during the pandemic. The company’s most recent earnings report indicated an approximate 5% allowance to cover estimated delinquencies.

2021 Global Payments Report by Worldpay said buy now, pay later has an under 2% penetration in the U.S. With BNPL solutions on Shopify, the payment option is going mainstream.

Shopify Embraces ‘Buy Now, Pay Later’