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What are Afterpay's merchant fees?

What are Afterpay's merchant fees?

We have recently set up Afterpay on several of our customers' Shopify businesses, and we discovered that the same question kept cropping up over and over again throughout the process. What is the fee that Afterpay charges the online store? As a result, we decided to look into it.

What Exactly Is Afterpay?

Afterpay is a novel approach for consumers to shop online, particularly if they wish to purchase things that they can't exactly afford at the time of purchase. Payments are divided evenly among biweekly instalments, so that the consumer does not experience the full financial strain of a purchase all at the same time. The consumer is not required to pay any interest or fees.

So how does Afterpay function, and how does it generate revenue? Aside from late fees collected from customers, they get the majority of their income from online retailers that use their service.

How much does Afterpay charge the merchant?

Afterpay charges the online business a fixed cost of 30 cents as well as a commission that fluctuates depending on the amount and number of transactions performed via the service. The more you sell at a greater value, the lower the percentage charge will be for each sale you complete. The cost goes from little more than 6 percent each transaction all the way down to 4 percent per transaction on the low end. However, although the price is higher than standard credit card costs, the advantages may be sufficient to offset the increased expense.

They now take Mastercard and Visa credit and debit cards issued in Australia, and they are integrated with Shopify, WooCommerce, Neto, BigCommerce, and Magento at present time. They also accept payments through PayPal.

What is the average time it takes for Afterpay to pay the merchant?

Afterpay might take up to 48 hours to pay the merchant in most cases.

What Are the Benefits of Afterpay for Shopify Merchants?

Shopify stores profit from this service since they may utilise it to give clients payback options while still receiving immediate cash.

Afterpay contributes to the success of Shopify shops by:

  • Rising online conversion rates result in increased sales since your clients are more driven to make purchases that they may otherwise hesitate to make in person.
  • Customers that have more time to pay for their purchases will likely spend more.
  • A broader client base your new consumers may already be familiar with the Afterpay payment method when they come to you.
  • Decreased cart abandonment means that more shoppers will be able to make a purchase right away.
  • Potential satisfied customers: as clients get more knowledgeable and comfortable with your shop and checkout process, the likelihood of them making another purchase from you grows.
  • Reduction in fraud and credit risk: Because Afterpay resolves purchase payments in advance, it lowers the danger of credit card fraud, which is beneficial to many small Shopify firms.
  • Costs are being decreased as a result of lower customer service expenditures, cheaper marketing costs, and lower return rates, among other factors.

Are merchants permitted to pass on Afterpay fees?

While the rates may be higher than those associated with more conventional payment methods, can a business just pass along part or all of the expenses to the customer? Not yet, however the Reserve Bank of Australia is promoting regulatory changes that would eliminate its no-surcharge policies.

Currently, Afterpay prohibits merchants from passing on merchant fees to customers or putting a premium on purchases made via their buy now, pay later services.

Is Afterpay a Good Investment?

Afterpay is gaining traction with clients, particularly in the online fashion industry. As more eCommerce merchants provide this service, buyers will increasingly see it as a preferable payment method. If a consumer is unfamiliar with Afterpay, they are invited to register from inside the online store.

Once a client enters the Afterpay eco-system, they become more aware of stores that provide the service and are more likely to make a purchase, maybe spending more than they would have done otherwise. Additionally, it mitigates the fraud risk connected with using credit cards in online stores.

Consider your product's pricing point and your consumers' online purchasing behaviour. Would consumers have purchased regardless of the offer? Did you just give that % away for free?

The only way to really understand how it will affect your specific shop is to give it a try and see whether it increases conversions and transaction value.

How Does Afterpay Integrate With A Shopify Store?

Complete these easy steps to add Afterpay as a payment option to your Shopify shop.

  • Navigate to the Admin section of your Shopify shop.
  • Select Settings, followed by Payment Providers.
  • Click the 'Select extra payment method' drop-down box in the 'Alternative Payments' section.
  • From the drop-down menu, choose 'Afterpay'.
  • In the Merchant ID area, enter the Afterpay-provided Merchant ID.
  • In the Secret Key section, enter the Afterpay-provided Secret Key.
  • Ensure that the 'Enable test mode' option is not checked. If this box is checked, the integration will fail.
  • To activate Afterpay, click the 'Activate Afterpay' button.

How To Easily Integrate Afterpay Into A Shopify Product Page

You'll want to incorporate the Afterpay logo into your Shopify product page to alert clients to the availability of this payment option. If you're unfamiliar with Shopify's liquid code, this section may be challenging, and as experienced PHP developers, we're happy to assist if you'd prefer have it handled by a professional web designer.

If you're interested in giving it a try, you'll need to change the liquid code and insert the script into your Shopify theme according to the Afterpay guidelines. Navigate to your online store's > Themes > Edit Code page. Then, in your product template's price and add to cart sections, enter the Afterpay/Shopify script. Save and reload the document.

Under the product price, the Afterpay snippet (and logo) should now display. As a last check, go to the checkout process and examine whether the Shopify checkout process supports Afterpay.

We've integrated Afterpay into a variety of Shopify-based online stores. Therefore, if you're interested in learning more about how much Afterpay charges merchants and other online retailers, or if you want assistance with your Afterpay/Shopify connection, please contact us.

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