Shopify Launches Shop Pay for Enterprise and Signals Opening of Payments Kimono
While you have been able to use different payment processors for Shopify for some time, certain elements have been locked down, including their Shop Pay accelerated checkout experience - long seen as one of the crown jewels of Shopify. In the US to my knowledge, Shop Pay was exclusively using Stripe for its credit card payment processor.
As Shopify signaled its intention earlier this year to go up-market with Commerce Components, the worry was simple. How to penetrate if you can't support the payment processors used in-market?
Today, Shopify has released a few new updates:
One, Enterprises now can use its Shop Pay accelerated checkout solution as a component, even if the rest of the business is not on Shopify. This is made possible by all the re-architecture / refactoring Shopify has done in the past couple of years. (I guess I thought this was already coming, but this makes it more official for me)
Two, Adyen is coming to Shop Pay later this year.
You need payment processor flexibility in the mid-market (IMO) and certainly in Enterprise segments. Why?
Rates are paramount. Enterprises have volume-based negotiated rates for payment processors and associated fraud services. Switching is a non-starter.
Contracts prevent switching. Payment processors like to sign up long-term clients. Unless Shopify adds more flexibility to Shop Pay, it would blunt its adoption.
What advantages will Shopify have in this space?
* Shop Pay is seen by players not on Shopify as a big advantage for the company, particularly when you consider the alternative of building your own checkout solution from the ground up in a headless fashion.
Where will the market land?
Custom checkout solutions will always be possible with raw payment gateway APIs, tax, fraud, address validation, identity verification, BNPL, and other solutions. However, for most companies, this is the hardest thing a technology organization will ever do -- not only initially, but ongoing.
Accelerated checkout solutions from platforms, of which Shop Pay is one, will allow merchants to perform more of a configuration-like experience.
Third-party checkout solutions and accelerators (Bolt, Bold, Checkout, etc.) will still exist, particularly in eCommerce solutions that don't lock down the checkout flow like Shopify has traditionally done.
Remaining questions from my side:
How will Shop Pay combine with the international merchant of record solutions? Is everything fair game now?
The release says that Shopify is releasing its support for Adyen later this year, if you want others can merchants configure Shop Pay to add another processor themselves?
Will Shopify look to accelerate its payment processor integration by acquiring more talent in this area? Or will it leave this to consulting partners? What pace is it trying to hit here?
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