A Shopify-Gallup survey earlier this year of nearly 47,000 entrepreneurs found that 40% of them cited financial risk as a barrier to starting a business.
Now, Shopify — an ecommerce platform popular with small and mid-size retail and B2B businesses — wants to turn the financial services tide for entrepreneurs. Noting that “entrepreneurs innovate at warp speed but traditional banks haven’t kept up,” the ecommerce technology provider is out to change the financial opportunities available to startups with the new Shopify Finance product suite.
“Needlessly complicated finances should not overshadow the dream of running a business,” Shopify said in announcing Shopify Finance. “Entrepreneurs deserve better.”
Shopify’s financial services range from funding to tax management
The Shopify Finance suite includes the following financial products and services:
⦁ Shopify Capital offers eligible merchants access for up to $2 million in “fast funding, regardless of size and financial maturity, with no credit checks or impact on personal credit score.”
Shopify says Shopify Capital is rolling out “monthly loan-cost structures” that result in lower overall repayment costs when merchants expedite their repayments. “This new pricing structure gives merchants more choice and flexibility unique to their businesses,” Shopify says.
⦁ Shopify Credit is a “pay-in-full” Visa business card that offers merchants up to 3% cash back on eligible marketing, wholesale and fulfillment purchases. “Now merchants get up to 10 months to pay by choosing to either pay the full statement balance within one month or pay over time from a percentage of sales,” Shopify says.
⦁ Shopify Balance is a “free business account” that allows merchants to get paid as soon as the next business day and comes with a 3.39% annual percentage yield (APY) reward on every dollar in a Shopify Balance account. Shopify notes that merchants on the Shopify Plus plan have access to a 4.43% APY reward, higher ACH financial transfer limits, and default next-day business-day payouts.
⦁ Shopify Tax lets eligible merchants automate their filing and remittance of sales tax returns. In a complementary service, Shopify Tax can automatically set aside sales tax funds into a Shopify Balance account to help meet tax obligations.
⦁ Shopify Bill Pay lets merchants pay business bills by their method of choice, including credit card, debit card, bank transfer or Shopify Balance, “whether or not a vendor accepts that form of payment.” In addition, Shopify says a new service lets merchants process batch and recurring payments to save time and combine payments to save on transaction fees.
Shopify startup merchant Pupsentials cites growth
Jake Chambers, co-founder of pet-image apparel embroidery Pupsentials, says in a recent Shopify press release: “We wouldn’t be on our way to $10 million in revenue if not for Shopify Finance. After working with multiple financial vendors in the past, it makes a lot more sense to run our business on one platform.”
Shopify Inc., an Ottawa, Canada-based company with its main U.S. office in San Francisco, has partnered with Stripe Payments Co. for money transfer and account services, with funds held at Evolve Bank & Trust and Fifth Third Bank. Shopify says that Shopify Credit and Shopify Balance Visa commercial credit cards are “powered by Stripe and issued by Celtic Bank pursuant to a license from Visa U.S.A. Inc.”
Shopify adds that “all funding through Shopify Capital in the U.S. is issued by WebBank.”
In Shopify’s most recently reported quarter, the Q2 period ended June 30, the company said gross merchandise volume on its ecommerce platform rose 22% year over year to $67.2 billion as revenue grew 21% to $2.05 billion.
In North America, 117 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2023, those 117 online retailers combined for more than $9.72 billion in web sales.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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