How to offer lines of credit or instalment plans for your customers

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The Rise of Merchant-Run Payment Plans

Types of payment methods

Straight up

The most common method for online purchases - someone sees an item they want to buy, submit their payment information, and are charged in full immediately. This is what happens when someone uses a debit card, writes a cheque, makes a bank transfer or gives you cash.

Financing with credit cards

Though it is almost identical for merchants, paying with credit cards is a bit different for consumers. Credit cards have been around for decades, offering to pay a merchant immediately but be paid back more slowly. This allows people to make bigger purchases in smaller installments or at a later date when they know money will be coming in. Credit cards let people get things they want or need before they have all the money ready up front, but can easily put people in debt with interest fees if customers don’t pay them back quickly or make purchases outside their budget.

Financing with merchant-provided instalments

The third option is kind of a blend of the first two, and has been around far longer than e-commerce has. A merchant can offer two buying options to their customer - one straight up purchase price, or the option to spread out the price of their purchase over time.

For merchants using Shopify, one of the strongest security features is that Shopify usually doesn’t store any credit card info (except in some cases with Shopify Pay). This means that offering payment plans isn’t yet accessible directly through Shopify.

There are still ways to make it happen, though, and the amount of companies that offer a payment plan service is growing rapidly. Third party companies offer payment gateways that allow merchants to be paid upfront and customers to pay in instalments or with a line of credit.

Should you bother?

There are clear advantages to offering payment plans for your customers. Across the world, merchants are finding that instalment options increase conversions, increase Average order Value, and increase repeat engagement. Basically, payment plans are another way to increase the frequency with which your brand is interacting with a customer - they’ll be paying you and seeing your name every month, rather than once-off.

By paying less at once, you can help catch those customers who are interested in your products but can’t afford the larger payments and want to avoid credit card interest rates. Payment plans allow you to make big ticket items (like electronics, furniture or designer items) more attractively priced. It’s a technique that’s been running older industries like car and mattress sales for decades, and is finally reaching well into the e-commerce sphere.

Customers tend to prefer instalment options over discounts, because of the ability to budget more easily. According to a survey by SplitIt about credit card consumer behaviour, over half of credit card users would prefer instalments to free shipping or a 10% discount, and 40% would increase their order value if they were paying in instalments.

What’s the catch?

If people pay upfront and you process their transaction right away, there’s very little risk associated with their purchase. However, if someone only pays for a portion of their purchase, there’s a risk they won’t be able to follow through on the rest.

This risk is covered by charging a higher fee by the company that does the lending. Either that fee is passed on to the consumer or the merchant - and the most competitive financing companies are offering zero-interest to customers. Meaning merchants are often assuming this risk, at least in part, through transaction fees. This fee could be up to double what you’d pay for a credit card transaction. However, it could still be worth it if you’re seeing conversions and average order values going up.

How to set up payment plan options for your customers

More and more of these services are springing up, and as they do they’re beginning to integrate with Shopify. Most work like a Payment Gateway - allowing you to easily offer it by simply adding the option from your Admin. Before choosing an instalment provider, take a close look at their fees, which risks they assume and where they offer their services.


AfterPay is a great payment plan service, as it pays merchants upfront and the third party assumes all risk from customers and fraud - plus you can use it as a normal Shopify Payment Gateway. Depending on order volume and value, you’ll be charged 4-6% per transaction. You can sign up here.

PayPal Credit

PayPal Credit works much like a credit card for customers, and like AfterPay, allows you to get paid in full right away. You’ll pay the normal transaction fees (2.9% + $0.30 per transaction). It’s pretty easy to offer for those already with a PayPal Business account. At the moment, PayPal Credit is only available for US merchants.


ZipPay is one of the cheaper services, with rates between 2-4% depending on the size of your business. It’s got some advantages - such as upfront payments for merchants and fraud and risk protection. Install it as a payment gateway through your Shopify Admin. ZipPay is currently only available in Australia.


FuturePay is a similar service, offering upfront payments to merchants and simple payment structures for customers. It costs 4.95% per transaction, and is only available for US shoppers at the moment. You can install it as a payment gateway for your Shopify store.


Unlike some other services, SplitIt lets customers use their same credit cards they already have for instalments, rather than pay a third party app. You can install it as a payment gateway just like AfterPay. There are two basic payment options for merchants - either accept payment in instalments as they’re paid out by your customer, or accept an up-front payment in full but for a higher rate. is an app that offers flexible and custom payment plans using Stripe. It’s easy to install directly into Shopify, and costs 5% per transaction.

Need help setting up payment plans for your customers?

Elkfox is a Shopify Expert and can help you explore all of your options for accepting customer payments. We build great sites and help you grow your business with a long-lasting partnership. Talk to us today about getting started.