Pushing further into the fintech space, Shopify has announced its entry into the credit card game. Shopify Credit, one of its latest offerings is designed especially for its merchants. According to Shopify President Harley Finkelstein, Shopify Credit is the company’s first pay-in-full business credit card. Issued by Celtic Bank and powered by Stripe, Shopify Credit is “accepted everywhere Visa is,” he said.
“We designed Credit with the reality of an entrepreneur in mind. We recognized that having smooth cash flow is important for business owners, and as a business matures, entrepreneurs may find themselves looking for a credit line to maximize their working capital for expected (and unexpected) expenses,” Finkelstein told TechCrunch in an email interview.
ALSO READ: Shopify Releases Summer 2023 Edition With 100+ Updates
Partnership With Stripe
This is not the first time Shopify has collaborated with Stripe. Their partnership dates back almost a decade. The e-commerce giant has earlier worked with the company to power Shopify Balance, a money management account and Shopify Payments.
Merchants’ applications will be evaluated on multiple aspects including sales performance. There won’t be any credit checks. Merchants will be eligible for Shopify Credit if they are based in the United States with sales on Shopify. They should also be present on Shopify Payments.
According to the company, KYC (know your customer) is crucial for Shopify Credit. Merchants can start spending as soon as their request gets approved. They can even earn 3 percent cash back on their virtual card in the “top spend category,” and 1 percent on other categories like marketing and shipping and wholesale. Shopify won’t be charging any additional fees for the credit card, not even late or foreign transaction fees.
Banks don’t have the insight we have. We are expanding the service, so it’s about not just running your shop but your entire business on Shopify, including the financial components. We have a significant depth of fintech capability and continue to expand those across the platform.
Tui Allen, Head of product for capital lending and financial services, Shopify
Combining Commerce With Fintech
In its effort to straddle the combination of commerce and fintech, Shopify in April 2022, partnered with Melio, an Israeli B2B payments startup based in America. The new bill pay tool was specifically designed for U.S.-based merchants so that they can seamlessly manage their vendors and expenses. Shopify Bill Pay, promises to help Shopify merchants save 16 hours of paying business bills on a monthly average. Shopify Bill Pay claims it is twice the faster as other B2B solutions available to manage expenses.
“Through our partnership with Melio, Shopify Bill Pay will give merchants more time to invest back into their business and brings us one step closer to advancing our mission of making commerce better for everyone,” said Shruti Patel, Global Head, Merchant Services Partnerships and Monetization, Shopify in a statement.
Matan Bar, Co-founder and CEO, Melio, said, “Shopify Bill Pay will bring a whole new experience to merchants who are overwhelmed by managing their inventories, preparing their stock for busy seasons, and keeping track of each vendor’s payment requirements.”
Shopify Capital
Another product, Shopify Capital launched in 2016 provides merchants access to working capital. Removing the complexities involved in traditional finance, Shopify Capital eases the process for merchants. With no lengthy application process and no personal credit checks, it allows small business owners to apply for and pay back through the existing Shopify platform they use to run their online store.
Once approved by experts, funds get deposited within two business days. There are no hidden fees and uncertainty of compounding interest rates. Merchants repay based on a mutually agreed fixed percentage of daily sales. Most importantly, there is no time limitation involved for the repayment — merchants can repay based on their sales, hence payments flex with the business. In 2022, it was launched in Australian market.
Tui Allen, Shopify’s head of product for capital lending and financial services, said, “We are embedding capability directly where merchants are running their shop. Banks don’t have the insight we have. We are expanding the service, so it’s about not just running your shop but your entire business on Shopify, including the financial components. We have a significant depth of fintech capability and continue to expand those across the platform.”
Shopify Balance
In November 2022, the e-commerce giant launched Shopify Balance. B2B e-commerce payment experience company Balance announced its Shopify integration. Using Balance, Shopify merchants can streamline and fully automate the B2B payment procedure for their e-buyers. The Balance app allows e-commerce merchants to give their customers an option to defer payment by up to 2 months.
Lately, in Shopify Editions Summer 2023, the e-commerce giant rolled out Shopify Collective. Currently available only to US merchants, it is a tool that boosts B2B sales at a low cost and lowers the risks involved. It allows cross-selling, which means that merchants can ship products from other brands directly to their customers. It also reduces the role of suppliers.
“This is just one of the powerful offerings in our suite of B2B tools on Shopify. We also offer B2B on Shopify, our premiere solution for selling wholesale, which is a huge growth opportunity: the global wholesale market is estimated to be worth $7.9 trillion,” explains Shopify.
