What happened: Shopify has announced a few important updates to its banking product (LinkedIn) specifically aimed at their larger merchants using the Shopify Plus. The new features included rewards for account balance (aka interest, but they cannot call it that way), fast payouts, and high limits for transfers.
My comment: The Shopify Plus package starts at $2.300 per month; thus, it is built for brands with a substantial volume on the Shopify platform. Such merchants generate high fees for Shopify’s core product and it is expected that they will also have a higher bank balance and spending behaviour than Shopify’s customers on the normal plan. Therefore, it makes a lot of sense for Shopify to offer a tailored banking product for them, as this could generate substantial additional revenue for Shopify.
I also want to remind you that when Shopify introduced Shopify Balance, it always stated that they don’t aim to make a lot of revenue with the product itself but rather see it as a platform to launch more products. I would expect that when these larger merchants switch to Shopify Balance, they are also a lot more likely to use Shopify Capital, Shopify’s own lending product. This lending product will not only create additional interest income for Shopify but also impact the merchant’s overall volume on the Shopify platform.
My ask: Does any of my readers know somebody at the Shopify Fintech team and could introduce me? Maybe it’s time to invite them for a podcast episode :-)
