Shopify is integrating payments processing with its online storefronts, enabling merchants to accept and manage Visa, MasterCard and American Express payments directly through Shopify.
Called Shopify Payments, the processing system is a way for merchants to accept credit cards, manage finances and perform other functions in the same platform, says Louis Kearns, director of payments for Shopify, an e-commerce company that enables companies such as Gatorade and Tesla Motors to create online stores.
"The merchants don't have to pull in information from third parties to figure out payments," Kearns says. Shopify Payments provides merchants with an alternative to obtaining a third-party processor and approval for a merchant account, he says.
Stripe, which already powers Shopify's onboarding processes, handle processing for Shopify Payments. "Merchants can accept their first sales right off the bat," Kearns says.
Shopify Payments charges 2.9% plus $0.30 per transaction for its basic plans, and offers fee breaks for larger volumes. There are no added fees for processing American Express or international credit cards. Shopify also charges $14 per month for its storefront services.
Shopify Payments also handles functions such as instant setup and approval; real-time payment tracking; chargeback recovery; and matching payments with orders. The platform also matches inventory and sales to payments information.
"We expect the vast majority of our merchants to move over, and we will continue to add new features," Kearns says. Merchants' don't have to migrate to Shopify Payments, Kearns says, adding the company is adding more payment gateways, which could be accessed via Shopify Payments.
Among other companies, Square allows merchants to establish an online store called Square Market , and PayPal is deeply integrated with parent company eBay's online marketplace.
For smaller merchants, the bundling of services such an online marketplace and payments can be attractive, says Arkady Fridman, a senior analyst at Aite Group.
"There is a certain value in having all of these pieces being offer form a sole solution provider," Fridman says, adding sole proprietorships and very small merchants can be a particularly attractive target.