How to Add Shop Pay Installments to Shopify: A Merchant Guide

Introduction

Offering Shop Pay Installments helps merchants increase average order value and reduce cart abandonment by letting customers split purchases into smaller, manageable payments. This Buy Now, Pay Later (BNPL) solution is integrated directly into the Shopify ecosystem, making it one of the most straightforward ways to offer flexible financing without managing third-party contracts. While the setup is simple, optimizing how and when these options appear is where smart merchants find the most value.

We designed HidePay on the Shopify App Store to give you that exact control over your checkout experience. This guide explains the technical steps to activate installments, the eligibility requirements you must meet, and the strategic ways to manage payment visibility to protect your margins. By the end of this article, you will know how to enable this feature and how to ensure it serves your business goals effectively.

Eligibility Requirements for Shop Pay Installments

Before you attempt to activate installments, you must verify that your store meets specific regional and financial criteria. Shopify limits this feature based on your store's primary location and the currency you use for transactions.

Regional and Currency Constraints

Currently, Shop Pay Installments is only available to stores operating in the following regions:

• United States: Your store must be based in the U.S. and sell in USD.
• Canada: Your store must be based in Canada and sell in CAD.
• United Kingdom: Your store must be based in the United Kingdom and sell in GBP.

If your store is located outside these regions, the option will not appear in your payment settings. Additionally, you must have both Shopify Payments and the standard Shop Pay accelerated checkout activated. Because Shop Pay Installments is a feature of Shopify Payments, you cannot use it with third-party gateways like Stripe or Authorize.net as your primary processor.

Product and Order Restrictions

Not every transaction is eligible for installment payments. Shopify and its financing partner, Affirm, enforce specific price floors and ceilings.

• United States and Canada: Orders must be between $35 and $30,000 (USD or CAD).
• United Kingdom: Orders must be between £50 and $30,000 (GBP).

The total order value includes taxes, shipping costs, and any discounts applied at checkout. It is also important to note that certain products are prohibited. Customers cannot use installments to purchase gift cards or subscription-based products. If a cart contains a mix of eligible items and a subscription, the installment option will be hidden automatically.

How to Activate Shop Pay Installments

If you meet the eligibility criteria, enabling the service takes only a few moments within your Shopify admin. Follow these steps to turn on the feature.

Step 1: Navigate to Payment Settings

Log in to your Shopify admin and click on Settings in the bottom-left corner. From the sidebar menu, select Payments. This section manages all your transaction providers and accelerated checkouts.

Step 2: Manage Shopify Payments

Look for the Shopify Payments section at the top of the page. Click the Manage button. This opens the detailed settings for your primary payment processor.

Step 3: Enable Installments

Scroll down until you find the Shop Pay section. Underneath the general Shop Pay toggle, you should see a checkbox for Shop Pay Installments. Check this box and click Save.

Step 4: Check for Premium Options

Some merchants are eligible for "Premium" installment packages. These options allow you to offer longer-term financing or 0% APR interest to your customers, which can significantly boost conversion for high-ticket items. To check your status, click Manage under the Shop Pay Installments section. if you are eligible for the premium package, you can select it and accept the additional financing terms offered.

Displaying Installment Banners on Product Pages

Simply enabling the payment method at checkout is often not enough to drive sales. Customers need to see the installment option early in their shopping journey. Adding a banner to your product pages and cart can inform customers of their "purchasing power" before they reach the final checkout step.

Using the Marketing Toolkit

Shopify provides a Shop Pay Installments marketing toolkit. This includes pre-approved messaging and brand assets that you can use in your store's design. Using these assets ensures you remain compliant with financial disclosure regulations, as installment offers are considered a form of credit.

Adding Banners via Liquid (For Developers)

If you use a vintage theme or want custom placement, you can add the installments banner using Shopify's payment_terms filter. This filter pulls the necessary disclosure text and dynamic pricing directly from Shopify's servers.

To add the banner to a product page, you would typically place the following code within your product-form.liquid or a similar section:

{{ form | payment_terms }}

This code must stay within the product form tags so it can update dynamically when a customer selects a different variant with a different price. For the cart page, you place the same tag within the cart form. Most modern Online Store 2.0 themes allow you to add this as a block within the theme editor without touching code.

Strategic Control Over Payment Methods

While offering installments is generally positive, there are times when you may want more granular control over when this option appears. This is where we see merchants utilize our app to refine their checkout. See How to create a payment customization for step-by-step instructions on building rules.

Sorting for Conversion

At checkout, the order in which payment methods appear can influence customer choice. If you prefer customers to use Shop Pay Installments because it results in a higher average order value, you can use the app to move it to the top of the list. Conversely, if you find that installments result in higher return rates for specific product categories, you can sort it lower or hide it for those specific items. Learn how to sort and rename payment methods in the checkout.

Hiding Based on Customer Data

Not every customer segment should see every payment option. For example, if you have a B2B customer segment tagged as "Wholesale," you might want to hide installment options for them to encourage direct bank transfers or standard credit card payments. We built the app to allow for these specific "if/then" rules — see the tutorial on how to hide payment options by customer tag.

Geographic and Delivery Rules

Even though Shop Pay Installments is restricted to certain countries by Shopify, you might want even tighter control. If you have specific provinces or zip codes where you experience high shipping costs or delivery delays, you might choose to hide financing options for those regions to simplify the transaction. The help doc on managing payment methods based on zip codes shows how to target postal areas with HidePay rules.

Understanding Payouts and Fees

When a customer uses Shop Pay Installments, the financial workflow differs slightly from a standard credit card transaction.

How You Get Paid

One of the biggest benefits of this system is that you do not have to wait for the customer to pay their installments. Once you capture the payment for an order, you receive the full amount (minus fees) within 1 to 3 business days. Affirm handles the risk of collecting payments from the customer. If the customer fails to pay their installments, your payout is not affected.

Transaction Fees

There is no monthly subscription fee to use Shop Pay Installments, but the transaction fees are higher than standard Shopify Payments rates. This is because the fee covers the cost of the financing and the risk taken on by the lender. To see your specific rates:

1. Go to Settings > Payments.
2. Click Manage on Shopify Payments.
3. Select View payment rates.

These fees are not returned to you if you issue a refund. This is a critical detail for margin protection. If a customer returns a $1,000 item bought via installments, you will be out the original transaction fee.

Managing Disputes and Refunds

Handling returns for installment orders is similar to standard orders, but the customer's experience is different.

Processing Refunds

When you refund an order in the Shopify admin, the amount is deducted from your next available payout. The customer's installment plan is then updated by Affirm. If the refund is partial, the customer’s remaining payments are adjusted. If the refund is full, any payments they have already made are returned to their original payment method, and future payments are canceled.

Handling Disputes

If a customer opens a dispute, you will receive an email from Affirm rather than a notification in the Shopify admin. You generally have 15 days to provide evidence, such as proof of delivery or a signed return policy. During this time, the funds are held. If you win the dispute, the funds are released back to your Shopify Payments account.

The Technical Advantage of Shopify Functions

Modern payment customization relies on Shopify Functions. In the past, merchants had to use Shopify Scripts, which were often slow and only available to Shopify Plus users. HidePay is built on native Shopify Functions, which means our rules run directly on Shopify's infrastructure. Read more about why functions matter in our post “Why Shopify Functions are the future and scripts are the past.”

This provides two main benefits:

1. Speed: There is no delay at checkout. The rules are processed instantly.
2. Reliability: Because it is native, it does not rely on theme-side code that can break during updates.

This technical foundation ensures that whether you are hiding Shop Pay Installments for a specific product tag or sorting it to the top for US customers, the checkout remains stable and fast.

Next Steps for Your Store

Adding Shop Pay Installments is a practical way to make your store more accessible to a wider range of customers. Once you have confirmed your eligibility and toggled the setting in your admin, your focus should shift to optimization.

• Verify your store is in the US, UK, or Canada and uses the local currency.
• Activate Shop Pay Installments in the Shopify Payments settings.
• Add marketing banners to your product pages to inform customers of the option.
• Monitor your return rates and transaction fees to ensure the feature is profitable.

If you find that you need more control—such as hiding installments for high-risk orders, sorting payment methods to guide customer behavior, or renaming options for clarity—consider our suite offering; see Introducing Nextools’ HideSuite: the bundle for smart Shopify merchants for details.

If you want to start building rules in your store today, install HidePay.

FAQ

Can I choose which products offer Shop Pay Installments?

By default, Shopify makes installments available for all eligible products in your store. You cannot natively toggle it off for specific items within the standard Shopify settings. However, you can install HidePay to create rules that hide the installment option at checkout based on the contents of the customer's cart.

Why is Shop Pay Installments not showing up in my settings?

The most common reason is geographic or currency eligibility. You must be located in the US, UK, or Canada and use the primary currency of that region (USD, GBP, or CAD). Additionally, you must have Shopify Payments and Shop Pay already active. If you use a third-party gateway for credit cards, installments will not be available.

Do installments affect my customer's credit score?

Creating a Shop Pay Installments account does not result in a "hard" credit pull that impacts a customer's score. However, if a customer chooses a monthly payment plan (available in the premium package), their payment history and credit utilization with Affirm may be reported to credit bureaus, which can influence their score over time.

What happens if I add an item to an order paid with installments?

You cannot edit an existing order that was paid for using Shop Pay Installments. If you need to add an item, you must create a separate order for that item. The customer will need to pay for that new order using a standard payment method, as invoices sent after the initial checkout do not support installment plans.