Shopify Expands Into Credit Cards as It Pushes Further into Fintech Space

In a move that marks a significant expansion of its services, Shopify, the e-commerce giant, has announced the launch of Shopify Credit, a business credit card designed exclusively for its merchants. This new product is powered by Stripe and issued by Celtic Bank, making it accepted everywhere Visa is.

According to Harley Finkelstein, President of Shopify, "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."

Table of Contents

Shopify’s Partnership with Stripe

This move is not the first time Shopify has teamed up with Stripe. The two companies have been partnered for nearly a decade, with Shopify using Stripe to power Shopify Payments, its payment processing solution, and Shopify Balance, a money management account.

How Shopify Credit Works

To be eligible for Shopify Credit, merchants are evaluated on a variety of factors during the application process, including their sales performance. Specifically, eligibility is based on the merchant being on Shopify Payments and U.S.-based with sales on Shopify. Additionally, KYC (know your customer) requirements apply.

Once approved, merchants can start spending immediately with a virtual card. They will also earn:

3% cash back on their top spend category
1% on remaining categories such as wholesale, marketing, and shipping

Key Benefits of Shopify Credit

Shopify is emphasizing several key benefits of its new credit card:

No fees: Shopify will not charge any fees for the card, including no late or foreign transaction fees.
Immediate spending: Merchants can start spending immediately with a virtual card.

Shopify’s Efforts to Straddle Fintech and Commerce

This move is just the latest in Shopify’s efforts to straddle the intersection of fintech and commerce. Some notable examples include:

In April, Shopify teamed up with Israeli B2B payments startup Melio to launch a new bill pay tool designed to allow U.S.-based merchant customers to manage their expenses and vendors via its platform.
In 2016, Shopify launched Shopify Capital, which helps merchants gain access to working capital.
Last year, it introduced Shopify Balance, aimed at helping merchants manage their money. It also offers loan facilities.

Conclusion

With the launch of Shopify Credit, Shopify is further expanding its services to meet the evolving needs of its merchants. By offering a business credit card with no fees and immediate spending capabilities, Shopify is providing its customers with a valuable tool to help them manage their finances and grow their businesses.

What’s Next for Shopify?

As Shopify continues to expand its offerings, it will be interesting to see how this new credit card product impacts the market. Will other e-commerce platforms follow suit? How will merchants respond to this new offering?

Only time will tell, but one thing is certain: with Shopify Credit, Shopify has solidified its position as a leader in the world of e-commerce and fintech.

Related Topics