Shopify's name is practically synonymous with digital commerce — which is why it's well suited to follow tech-savvy consumers back into stores as more people return to in-person shopping.
Shopify this week launched POS Go, a mobile device that expands Shopify's mobile point of sale to add more payments data and links to merchant services as the company looks to take advantage of an increase of in-store sales and growth in its payment business.
More payment processors are adding multichannel shopping and data analytics, as payment acceptance technology becomes less of a competitive differentiator than intelligence that can be used for marketing or to manage supply chains and inventory.
"The offering is not just about supporting payments, it also has to be integrated with all of the essential services of running a business," said Richard Crone, a payments consultant.
Shopify's POS Go, which builds on
Merchants can build digital shopping carts in stores and send an email to consumers to complete purchases for products that can be shipped. Payment acceptance options include tap, swipe and chip cards through a card reader. Businesses can also view sales, analytics and inventory on POS Go across channels.
Shopify is also an early adopter of Apple's Tap to Pay, which allows merchants to use personal iPhones to accept payments. Other early adopters include
"Shopify is mobilizing all paths," said Crone, adding the bundle of payment and merchant services through POS Go and partnership with Apple gives Shopify the opportunity to expand its customer relationship management. This can allow Shopify to bolster its competitiveness against merchant acquiring banks, legacy processors and other companies that sell payment services to merchants.
"That should be a lesson for traditional merchant acquirers," Crone said.
Shopify is addressing growth in brick-and-mortar volume as consumers return to a mix of online and in-store shopping, as opposed to the almost purely digital shopping they did early in the pandemic. Brick-and-mortar sales in Shopify's network at the end of June were 14% higher than the same time in 2019. A
The company's overall multichannel gross merchandise volume for the second quarter of 2022 was $46.9 billion, which was an increase of $4.7 billion over 2021. Shopify in earnings statements attributed the growth to strong performance in its payments business and point-of-sale hardware.
"We know that consumer expectations are shifting, and as the commerce platform, the benefit we give Shopify merchants is context," Arpan Podduturi, vice president of product at Shopify, said in an email. "Today consumers will often have researched their purchase online before going in store, and so it's up to retailers to capture that foot traffic and elevate the experience beyond a transaction."
Shopify has been adding payments and merchant services for the past several years. The company in 2020 released
Shopify competes with other technology-focused payment companies, though it has a slightly different merchant mix. Stripe, PayPal and Block have traditional strengths among small merchants, and have used that base to expand to larger clients. Shopify has a base of e-commerce clients that includes
There are several areas of payment acceptance that are rapidly evolving and of interest to companies that offer products to merchants, including cloud technology, payment facilitation and the expansion of mobile platforms, according to Tim Sloane, vice president of payments innovation at Mercator Advisory Group.
The cloud enables geographic reach, making a system easy to scale and adding speed to connect with partners.
The
"Mobile platforms are rapidly becoming sufficiently secure that mobile devices can be used as an acceptance terminal and as the primary authorization mechanism," Sloane said.
With about 83% of retail sales still happening in stores, according to the
"The vast majority of sales are still in stores," said Daniel Keyes, an analyst at Javelin Strategy & Research. "Even though e-commerce has grown, Shopify is trying to use those merchant relationships to tap into in-store sales. It doesn't have technology that gives it a real advantage, but it does have merchant relationships."