With embedded finance projected to hit $230 billion USD next year, Shopify has launched Shopify Finance, a new unified dashboard for its FinTech offerings.
“We’re doubling down on the financial tools we give our merchants to help them win.”
As part of the launch, Shopify’s merchants in the United States (US) will gain access to an all-in-one dashboard that contains Shopify Balance, Credit, Bill Pay, Capital, and Tax, while Canadian merchants will only have access to Shopify’s Capital and Tax offerings.
The combined offering is meant to help merchants view and manage their business finances in one place on the Shopify admin page and mobile app.
“Everything we build is in service to making it easier for our merchants to start, run, and grow their businesses,” a Shopify spokesperson said in an email statement to BetaKit. “Managing finances is one of the biggest barriers to doing this successfully, which is why we’re doubling down on the financial tools we give our merchants to help them win.”
When asked if there were any plans to bring the remaining offerings to Canadian merchants, the spokesperson said they are always working to broaden the availability of their products “where and when it’s the right time to do so.”
Shopify Capital is the ecommerce giant’s small business loan fund, which launched for Canadian merchants in April 2020. The offering provides merchants with up to $2 million in loans, regardless of business size and financial maturity, that are paid back through a percentage of daily sales. Shopify claims it has provided more than $5.1 billion to merchants through its Capital offering to date.
Shopify Tax helps merchants with tax and compliance needs, providing automated sales tax calculations at checkout, filing preparations, and sales reports. Shopify has also added the ability for eligible merchants to automate the filing and remittance of their sales tax returns.
An increasing number of verticalized consumer apps and SaaS applications like Shopify have turned to embedded finance offerings in recent years, with Lightyear Capital estimating that these offerings will reach $230 billion USD in revenue by 2025. A 2020 report by Andreessen Horowitz found that, by incorporating FinTech offerings, a SaaS business can increase revenue per customer up to a factor of five.
“Today, merchants are stuck with traditional banks and their lengthy and complicated processes to manage their money, pay their bills and secure funding,” Shopify head of product for financial services Vikram Anreddy said in a video posted to LinkedIn. “It’s all very fragmented and overwhelming for entrepreneurs.”
Shopify did not respond to questions by time of publication about the popularity of its Finance offerings amongst Shopify merchants, but its lending business was cited as one of the key drivers of Shopify’s revenue growth in the third quarter of 2023 by CFO Jeff Hoffmeister.
Shopify is currently gearing up for its fiscal third-quarter earnings call, which is scheduled for Nov. 12, 2024.
Disclosure: BetaKit majority owner Good Future is the family office of two former Shopify leaders, Arati Sharma and Satish Kanwar.
UPDATE (10/29/2024): This story has been updated with commentary from Shopify head of product for financial services Vikram Anreddy.
Feature image courtesy Burst. Photo by Avelino Calvary Martinez.