Note: This article covers PayPay, a QR code payment service specific to merchants and customers in Japan. The information below will not be directly relevant if you are not selling in the Japanese market.
For those running an EC site on Shopify, choosing the right payment methods is extremely important. In recent years, as smartphone payment has become more widespread, PayPay has rapidly grown in popularity. This article explains in detail the benefits and drawbacks of adding PayPay to a Shopify store, along with the specific setup steps. Let's take a look together at what impact adding PayPay could have on your business.
What Is PayPay?
PayPay is a QR code payment service provided by "PayPay Corporation," established by SoftBank and Yahoo. With just a smartphone, customers can purchase goods and services "easily" and "at a great value" at brick-and-mortar stores and online stores alike.
Benefits of Adding PayPay to Shopify
Helps Reduce Cart Abandonment (Store Side)
The most common reason for cart abandonment is "the desired payment method isn't available." To prevent cart abandonment among customers who don't hold a credit card or who prefer not to use one, it's a good idea to add PayPay.
Source: PayPay Press Release
According to a press release issued by PayPay Corporation in February 2023, PayPay's registered users have surpassed 55 million, meaning the service has grown to be used by roughly 1 in every 2.3 people in Japan.
Source: SB Payment Service Press Release
Also, according to a survey by SB Payment Service, PayPay is the second most commonly used payment method on EC sites, after credit cards.
If you're looking to expand your payment options, PayPay is worth considering.
The blog article below introduces other measures for reducing cart abandonment on Shopify besides expanding payment types. Please use it as a reference.
Acquiring Younger Customers Who Can't Hold a Credit Card (Store Side)
Credit card payment is one of the main payment methods for EC sites, but many credit card companies set the minimum age for issuing a card at 18 to 20 years old or older. As a result, stores that only accept credit card payment are usually unable to sell to minors. With PayPay, minors who have obtained consent from a legal guardian can use their PayPay balance to purchase goods and services. Because of this, adding PayPay can help address this issue.
Acquiring Customers Who Prefer Not to Use a Credit Card (Store Side)
Many adults also feel reluctant to use credit card payment. Adding PayPay benefits both the store and customers who wish to avoid credit card payment, allowing them to still make purchases at the store.
Earning Points (Customer Side)
With PayPay, customers earn PayPay points on online purchases, just as they would with regular in-store shopping. This is a benefit for customers who are saving up PayPay points.
Drawbacks of Adding PayPay to Shopify
Increased Costs
Using PayPay may require a monthly fee, or increase payment processing fees. In addition, PayPay is a payment method other than Shopify Payments, so a transaction fee will also apply.
Since high fees reduce the store's profits, choose a provider with lower fees if you want to minimize costs.
The blog article below explains in detail the benefits of adding Shopify Payments and its payment processing fees. Please use it as a reference.
What is a transaction fee?
A transaction fee is a fee charged when receiving payment from a customer.
The transaction fee is waived when using Shopify Payments, but the following fees apply when using any other external payment provider.
| Shopify Plan Name | Starter | Basic | Grow | Advanced | Plus |
|---|---|---|---|---|---|
| Transaction fee | 5.00% | 2.00% | 1.00% | 0.60% | 0.20% |
How to Add PayPay to Shopify
To add PayPay to Shopify, you need to set up one of the following payment providers.
KOMOJU
KOMOJU is notable for having no initial or monthly fees, and for fast screening.
PayPay Costs
| Initial cost | Monthly fee | Payment processing fee |
|---|---|---|
| 0 yen | 0 yen |
Physical goods: 3.5% Digital content: 9% |
GMO Epsilon
GMO Epsilon is a payment service provider that lets you add a wide range of payment methods at once, including credit card, convenience store, and online bank payments. There are no initial fees or transaction processing fees, and it has been adopted by 42,000 or more companies to date.
Beyond payment services, it also offers a variety of its own services, such as shipping and financing.
The blog article below introduces GMO Epsilon in detail. Please use it as a reference.
PayPay Costs
| Initial cost | Monthly fee | Payment processing fee |
|---|---|---|
| Free | 2,000 yen |
Physical goods/services: 3.45% Digital content: 9.0% |
SB Payment Service
SB Payment Service is a payment service provider operated by SB Payment Service Corporation, a member of the SoftBank Group. In addition to offering a wide range of payment methods, it is known for marketing support aimed at boosting sales and a robust security setup.
The blog article below explains SB Payment Service in detail. Please use it as a reference.
PayPay Costs
| Initial cost | Monthly fee | Payment processing fee |
|---|---|---|
| 1,000 yen | 1,000 yen | 3.45% |
A Shopify App That Can Automatically Hide PayPay
After adding PayPay, you may run into situations where you want to hide it — for example, "since digital products have high fees, I want to hide PayPay for them," or "I want to hide PayPay when a preferred delivery date has been set."
This section introduces a Shopify app that can hide PayPay under any condition you like.
RuffRuff Order Limits
"RuffRuff Order Limits" is fully localized for Japanese and is Japan's first Shopify app built on the Cart and Checkout Validation API.
By using the "Cart and Checkout Validation API," it achieves order-limit processing on the server side, something that could previously only be handled on the front end. As a result, compared with existing order-limit apps, it delivers far more robust order restrictions that are harder to bypass.
With a single app, you can implement quantity limits, amount limits, bundling restrictions, customer restrictions, and payment-method hiding.
Using this app, you can achieve things like the following.
・Hide PayPay once the cart total reaches ¥3,000 or more
・Hide PayPay when the cart contains a digital product
・Hide PayPay for guest customers only
The blog article below explains how to use RuffRuff Order Limits to automatically hide smartphone payment (QR code payment) methods including PayPay when the subtotal exceeds 50,000 yen. Please use it as a reference.
In Closing
Adding PayPay is an option worth considering for anyone running a Shopify store. It offers many benefits, such as reducing cart abandonment, acquiring younger customers, and reaching customers who prefer not to use credit cards. On the other hand, the drawback of increased costs also needs to be weighed.
When considering adding PayPay, be sure to fully consider the following points.
- How well PayPay fits your customer base
- The likely increase in sales from adding it
- The balance between the added cost and the expected profit
- Comparison with other payment methods
Also, PayPay can be set up through payment providers such as KOMOJU, GMO Epsilon, and SB Payment Service. Comparing the features and fees of each is important for choosing what's best for your business.
Furthermore, using an app like "RuffRuff Order Limits" allows for flexible operation, such as hiding PayPay under certain conditions.
Ultimately, whether to add PayPay should be judged based on each Shopify store's own circumstances and goals. Use the information in this article as a reference, weigh it carefully, and choose the payment method best suited to you. Offering the right payment methods is an important factor that leads to greater customer satisfaction and increased sales.
Shopify also supports a wide variety of other payment methods. The blog article below introduces other payment methods you can add to Shopify besides PayPay. If you're considering adding a new payment method, please use it as a reference.
