On Thursday, it was revealed that payment processing giant Stripe and Evolve Bancorp will power two products within Shopify Balance, the Canadian e-commerce giant’s business banking offering first revealed earlier this year.
Stripe is already the payment processor for Shopify’s payments product.
Shopify will be using Stripe’s new Treasury product on the offering. Stripe and Evolve Bancorp will specifically power the Shopify Balance Account and the Shopify Balance Card. Stripe Treasury, also revealed Thursday, gives embedded business banking services to Stripe clients through APIs.
Stripe Treasury is currently partnering with banks to offer a banking-as-a-service API. The product allows Stripe clients to embed financial services that let business customers send, receive, and store funds. The product is being offered through banks such as Goldman Sachs, Evolve Bank, Citibank, and Barclay’s.
Shopify is one of the first major partnerships to come out of the Stripe Treasury product launch. Shopify Balance is composed of three products: a bank account, card, and rewards program for Shopify merchants. According to Shopify, the goal behind Balance is to provide financial services that are built specifically for independent businesses and entrepreneurs.
“One of the biggest barriers for independent entrepreneurs is getting access to critical financial products,” said Tui Allen, senior product lead for banking at Shopify, in a statement to BetaKit. “Partnering with Stripe allows us to leverage their scale and efficiency, enabling us to focus on empowering our merchants and building Balance to meet their specific needs.”
Shopify’s banking product was first announced in May during the company’s virtual Reunite conference, and was initially set to launch in the US this year. The move represented a major expansion into the FinTech vertical for Shopify and put the company in competition with homegrown FinTech startups like Koho, Wealthsimple, and Borrowell, as well as global players including Revolut and Monzo.
RELATED: Calgary FinTech startup Helcim develops own payment infrastructure, following in footsteps of Stripe, Square
At the time of Shopify’s announcement in the spring, the company said it planned to work with a “trusted card issuing and bank partner” to launch Balance, but did not share details on who that partner would be.
“We’re excited to soon bring Balance to our merchants,” Allen added. “It’s another piece in the puzzle of making entrepreneurship simple and accessible to as many people as possible, with a rewards program focused on helping our merchants run and grow their stores.”
This is not the first time Shopify has teamed up with Stripe. Stripe is already the payment processor of Shopify Payments, which allows merchants to easily set up payments for their store. Notably, Stripe has also teamed up with Canadian companies like Jobber and Lightspeed to power those companies’ payments solutions and loan offerings.
Evolve Bancorp, a bank based in Memphis, Tennessee, will be the bank behind Shopify Balance. Shopify needs a financial institution with a banking licence in order to offer Balance, as banking licenses are notoriously difficult to attain. Evolve has been recognized as one of the few, smaller American banks that are opting to work with the new wave of FinTech startups instead of trying to beat them.
With its new partners, Shopify is now looking to launch Balance early next year for merchants in the US. It is not clear when Shopify Balance will be available to Canadian merchants.
Image source Shopify.