ECommerce is currently one of the fastest expanding sectors of the economy. With the continued expansion of online shopping, it's no surprise that there are numerous payment gateways striving for a piece of the cake.
Payment options, believe it or not, play a significant role in online conversion rates. As a result, having a sufficient variety of payment methods for your consumers is always beneficial. Hence, if you want to increase your sales, you need to carefully consider the payment methods you provide.
Thus, is Shop Pay similar to PayPal? If you're still uncertain about which is better for your company, keep reading for a detailed comparison of Shop Pay vs PayPal.
Overview Of Shop Pay And PayPal
What Is Shop Pay?
Shop Pay is an online payment method invented by Shopify, an established eCommerce platform. It is intended to provide customers with a straightforward and secure checkout process when making transactions on Shopify-powered websites.
Shop Pay saves a customer's payment and shipping details, making it easier for them to finish future purchases.
Shop Pay protects sensitive information with effective encryption technology and provides services such as order tracking and automatic address filling. It is available on mobile as well as desktop computers, allowing users to make purchases from anywhere.
All Shop Pay logos are available as a zip file containing.eps,.jpg,.png, and.svg files. Whenever feasible, show the Shop Pay logo in full color. Click here to download
What Is PayPal?
PayPal is a well-known and trusted online payment network that allows consumers and organizations to send and receive money online. It allows users to link their banking accounts, credit cards, or debit cards to their PayPal accounts, giving a secure means for making online purchases.
PayPal provides buyer and seller protection packages to help protect against fraud and unauthorized transactions. It also allows users to transmit money worldwide, making it an effective tool for cross-border transactions.
PayPal’s logos and banners are an excellent approach to inform your customers that you use PayPal to safely handle their payments. They provides hosted banners, buttons, and payment option visuals for use on your homepage as well as at checkout. Visit the Logo Center of PayPal to use them.
Detailed Comparison of Shop Pay vs PayPal
Let's go over each of these key subjects in further depth now. This will allow you to have a more specific understanding of the basic differences of Shop Pay vs PayPal.
How Does Shop Pay Work?
When a customer visits your Shopify store's checkout page, he or she has two choices: Express checkout or Manual checkout by entering all of the details (contact information, shipping information, and payment information).
Whenever the customer has never used Shop Pay before, it will require them to join up with their email and phone number. The customer can then enter their payment card information, save it with Shop Pay, and proceed to the checkout.
Once a consumer has signed up for Shop Pay, they only must provide their email address and an SMS verification number when making purchases from any Shopify store, saving them from having to enter their shipping and payment information again.
How Does PayPal Work?
When you enable PayPal on your Shopify store, the PayPal payment option shows in the Express checkout options. The customer will be taken to PayPal's checkout page after selecting the PayPal option.
If the customer has previously created a PayPal account, they may simply enter their email or cellphone number and password to log in and finish the payment. Otherwise, the customer must first sign up for and create a PayPal account.
Customers can also use their debit or credit card for payments. By doing so, the consumer can finish the payment with a debit or credit card without disclosing any information to the merchant.
Quantity of users:
Shop Pay active users:
Approximately 60 million of Shop Pay's users are very active and engaged with the brand, estimated Shopify. According to this, millions of consumers have already used Shop Pay to pay for their purchases.
PayPal active users:
Without any doubts, PayPal is one of the most widely-used payment platforms on the whole world. According to Statista, as of the fourth quarter of 2022, PayPal had approximately 435 million active users.
Eligibility and requirements
Shop Pay eligibility criteria
Shop Pay is a popular online payment method that is widely accepted by many online shops. It is built particularly for Shopify-powered stores, so if you come across a website that operates on the Shopify platform, chances are they take Shop Pay. Shop Pay is available in the payment settings of all merchants who use Shopify Payments.
Dolls Kill, NOBULL, Dr. Squatch, Olaplex, and Nailboo are just a few of popular stores that use Shop Pay.
However, only a few nations offer Shopify Payments. You can also enable Shop Pay for third-party gateways if your online store is located in the United States and meets all of the Shopify Payments standards.
Overall, this limits Shop Pay to particular merchants in a small number of countries.
PayPal eligibility criteria
The difference of Shop Pay vs PayPal is that PayPal has been around for a while and has built up itself as one of the most commonly used online payment solutions. The most beneficial aspect about PayPal is that it is available in over 200 countries and regions.
PayPal can be utilized on a variety of e-commerce sites, including major ones such as eBay, Amazon, and Etsy. Furthermore, PayPal provides a variety of features and services that appeal to various needs, such as buyer protection and international payment choices.
While Shop Pay vs PayPal are generally accepted, their eligibility may vary based on the exact website or platform you are utilizing for your online transactions.
Shop Pay transaction fees
There are no additional costs associated with enabling Shop Pay. However, because it relies on the same payment processor, Shop Pay has the same transaction costs for credit card payments as Shopify Payments. These fees differ depending on your Shopify plan.
When you use Shopify Payments, you will not be charged third-party transaction charges for any orders completed through Shop Pay.
PayPal transaction fees
PayPal transaction costs are dependent on where you sell. For US sales, there is a 2.9% processing fee plus a $0.30 USD flat cost. For foreign sales, there is a 4.4% transaction fee plus a set fee based on the currency.
Installment payments service
Shop Pay installments
Shop Pay's installment payment solution is one of its greatest strengths. Customers can make payments in installments with Shop Pay Installments.
Customers can choose between two alternatives at the checkout:
- Customers can make four biweekly interest-free payments for orders ranging from US$ 50 to US$ 999.99.
- Customers can also make monthly payments for products ranging from US$150 to US$17,500. However, keep in mind that monthly payments are interest-bearing and range from 10% to 36% APR (Annual Percentage Rate). Customers can make installment payments over 3, 6, or 12 months, depending on the purchase amount.
PayPal’s “Buy Now, Pay Later” service
PayPal's "Buy now, pay later" feature recently introduced. The installment payment choices are similar to Shop Pay Installments in certain ways. Customers have the option of making four interest-free payments (biweekly) or making 6, 12 or 24 monthly installments.
Here are the specifics of the various PayPal options:
Safety and security
Shop Pay security features
When making payments online, security is essential. Shopify gives significant importance on its platform's safety and security. Here are a few crucial factors that make Shop Pay secure:
- PCI-Compliance: Shopify is PCI DSS Level 1 compliant. PCI DSS stands for Payment Card Industry Data Security Standard, and it is a security standard for businesses that deal with debit and credit card data from clients.
By default, all Shopify stores are PCI compliant. As a result, when your customers choose to save their payment information, it is encrypted and safely saved on Shopify's PCI-compliant servers.
- SMS verification:
Customers need to provide SMS verification codes before finishing the purchase, which assures that only the account owner is making the payment using Shop Pay.
PayPal security features
PayPal, being one of the initial innovators in online payment systems, lays a high emphasis on security. Buyer protection is provided by PayPal, which assures that buyers are compensated if they do not receive the purchased item or if it differs considerably from the seller's description.
Furthermore, PayPal provides Seller Protection, which protects sellers from illegal transactions or accusations of non-delivery.
Shop Pay vs PayPal both place a premium on the security of their users' data and transactions. They are equally devoted to offering a safe and secure online payment experience, despite the fact that they use various security procedures.
Shop Pay customer service
Shop Pay is well-known for providing exceptional customer service. Their committed employees is ready 24/7 to assist consumers with whatever inquiries or worries they may have.
Shop Pay's customer assistance is available via a variety of channels, including live chat, email, and phone. Customers receive rapid support because of their quick reaction time. Additionally, Shop Pay's website includes a thorough FAQ section that addresses frequent problems and provides self-help resources for users to get immediate responses to their queries.
PayPal customer service
PayPal also provides customer support options to handle any complaints or problems that consumers may have. They give service by email, phone, and a community forum where users can ask questions and communicate with other PayPal users.
Although they do not give live chat support like Shop Pay, PayPal's customer service representatives attempt to deliver prompt and useful solutions to client inquiries.
PayPal also provides an extensive Help Center on its website, which contains a wide range of articles and tutorials to help clients find solutions to their issues.
FAQs about Shop Pay vs PayPal
Which is better: PayPal or Shop Pay?
Is Shop Pay a better solution than PayPal? When it comes to rapidity and convenience, Shop Pay outperforms PayPal. Moreover, Shop Pay offers lower fees than PayPal. However, in terms of greater availability, PayPal is available to merchants in more nations than Shop Pay.
Does Shop Pay offer buyer protection?
Shopify Protect only safeguards orders with all non-refunded products marked as Fulfilled. Shopify Protect is accessible only for orders paid for with Shop Pay. This includes orders placed using Shop Pay as an accelerated checkout method.
Does shop pay always allow payments?
Shop Pay lets you pay in whole at checkout or divide your purchase into recurring payments with Shop Pay Installments, through the internet and in person. Installment options vary by retailer and are available on orders totaling more than $50 USD, including discounts, shipping, and taxes.
How often does Shop Pay take money?
Paying in installments on Shop Pay enables you to divide your purchase amount into four equal biweekly installment payments or twelve monthly installment payments—all with 0% interest, no hidden or late fees with no impact on your credit card.
How do I cancel my Shop Pay account?
For removal from Shop Pay, insert your mobile number in the Shop Pay opt-out form and then got Submit request.
Is PayPal more secure than credit card?
PayPal prioritizes secure transactions so that consumers can send and receive money electronically. When compared to a credit card, PayPal is just as secure. Understand about the differences and similarities in the security of PayPal vs a credit card, as well as ways to decrease risk.
Shop Pay is a newer alternative on the market, but it has rapidly gained popularity among many online buyers. Its simplicity is one of the primary reasons of this. Shop Pay is intended to be as user-friendly as possible, and it connects easily with a wide range of famous online retailers.
PayPal, on the other hand, has been in operation for a longer period of time and is a better established payment processor. Although it is accepted by more online businesses than ShopPay, it can be more difficult to use.
It is critical to choose appropriate payment providers. But keep in mind that you don't have to consider what's "your preference" or what's best for you. Consider both "what is highly beneficial for them" and "what are your client's preferences."