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Shopify has a pattern of launching new products first in the U.S., its biggest market. But the business account and card also mark another step by Shopify into financial services. The company already provides payment processing and cash advances and loans to entrepreneurs, with approximately US$192 million in Shopify Capital funding outstanding as of the end of March. Shopify Capital launched in Canada in April.
The business account wasn’t the only financial service Shopify announced Wednesday, as the company unveiled a new “buy now, pay later” option that will launch in the U.S. later this year and let consumers pay in four interest-free instalments.
These products were among several new and updated ones that were announced in sync with Shopify’s Reunite event, a virtual reboot of the company’s annual Unite conference, which was cancelled in late February because of COVID-19.
“We’re going to give all eligible merchants on all of our plans the financial products they need to start, run and grow their business,” Shopify chief operating officer Harley Finkelstein said during the webcast.
The new products come as the coronavirus pandemic has nudged consumers towards more online shopping, with Shopify saying earlier this month that COVID-19 has “accelerated the shift of purchase habits” toward e-commerce.
While the pandemic may be increasing online shopping, it remains to be seen if it will translate into consistent profits for Shopify, which reported a net loss of US$31.4-million for the three months ended March 31. Revenues, however, grew 47 per cent year-over-year for the first quarter, to US$470-million.
The new products could help Shopify’s expansion efforts, with National Bank Financial analyst Richard Tse writing in a report earlier this month that they continue to believe Shopify “is in the early stages of a rapidly growing” market for e-commerce.
“With recent announcements of new services … we expect the pace of new product development to continue, as will adoption, which should drive up take-rates and merchant stickiness to the platform,” Tse said.