Shopify announces self-designed PoS card reader to grab US customers from Square

During its Unite conference in San Francisco, Shopify unveiled a string of new features for its merchants — including a chip and swipe point of sale card reader.

The wireless card reader, which is the first to be designed internally by the company, has a one-week battery life, will be offered for free to new and existing merchants without a POS solution, or $29 in Shopify’s hardware store. The reader uses Bluetooth LE and supports EMV for secure in-person selling. The solution is primarily targeted independent sellers at markets, festivals, pop-up stores, and replaces the company’s current reader that requires a headphone jack to function.

“One of the overall messages we’re trying to push is that Shopify is getting serious about hardware,” said David Seal, product manager at Shopify. “We’re bridging the gap from being just a software company to also doing hardware, and we’re very much becoming a technology company. If you look at Google and Apple, who specialize in hardware and software, that’s where we’re headed too.”

Seal said that part of the chip and card reader’s value add is that it deeply integrates with a merchant’s Shopify store, and supports over-the-air updates. Most brick-and-mortar merchants have ambitions to sell online eventually, and Shopify’s opportunity is in servicing both segments at a scale that other competitors may not reach. While merchants tend to think first about Square as a payment option, Shopify hopes that this will get more merchants identifying Shopify with payments.

“Shopify is getting serious about hardware.”
– David Seal, Shopify

The product will only be available in the US, Shopify’s biggest market, and one that is in desperately in need of secure chip commerce solutions. As a whole, Canada is a market that doesn’t see as much competition in the PoS space, and one of the reasons is Interac’s place and function in the Canadian market.

“The reason that this card reader doesn’t make a whole of sense in Canada currently is because it doesn’t support PIN entry. And because of that, it also won’t support Interac,” Seal said. “If you care about this device being used in a retail setting, in a brick and mortar store, not being able to accept Interac is not going to be very helpful to those merchants.”

Seal, who has worked on other Canadian Shopify projects, said that he’s been trying to speak with the right partners so that their solutions work with Interac. “It’s a bit of a monopoly because Interac is actually a consortium of some of the larger banks in Canada. I don’t think they’d say this directly, but things are difficult in my view on purpose to avoid new players in the space.”

With a competitive price, and deep integration with Shopify’s platform, Seal said that he definitely sees the company’s new as customer acquisition tool, most likely from PoS competitors like Square. Seal also said that the development team hopes to launch a solution more targeted to Shopify Plus customers in the future.

“I really love what the Plus team is doing, I really love the merchants they’re attracting, and to me, I see this as being our entry-level product,” said Seal. “The ultimate dream for us is to take a small merchant that’s selling somewhere like at a farmer’s market, give them this product to be more successful, give them this tool to grow their business, and have them be one of our Plus merchants. That’s the way we try to look at merchants using Shopify.”