Shopify adding point-of-sale terminals
New service aimed at small and mid-size businesses
Shopify Inc. is expanding its recently announced payment services to include instore point-of-sale terminals in a move to attract millions of small and medium-sized businesses looking for less expensive options for managing credit card payments.
The company, which specializes in helping people to set up and manage Internetbased stores, is launching a credit card payment processing solution that connects to an iPad and allows businesses anywhere to manage all of their in-store and online stock and sales through the Shopify platform.
Adam McNamara, vicepresident of product at Shopify, said Tuesday the decision to offer the service was initially made to help smaller shops that often sell online and then appear at bazaars, flea markets or farmers’ markets on weekends.
Those businesses have to employ a dedicated payment processing solution. some of which can be quite costly, to take credit card payments from walk-up customers.
“So far, it’s been impossible to bridge the online (retail store) with in-store,” said McNamara.
“No one is giving one system that does both.”
Shopify’s credit card payment terminal will compete with other recent entrants to the market, including Square, which has similar technology that uses a plug-in for a mobile phone to process payments, and more established payment processing units from big banks.
McNamara believes Shopify’s advantage lies in its ability to offer small and mediumsized businesses a one-stop solution that will create the online store, handle inventory positions, track delivery and customer feedback and handle payment processing both in store and online.
“There is no one in the space handling this the way we are,” he said.
“The future of retail is all about consumer choice. Consumers want to buy what they want, where and how they want it. They might want to buy in-store and have it shipped to them. They might want to buy online and pick it up in store.”
The company plans to price its offering at an extremely competitive rate to better compete with existing solutions.
Shopify’s card payment device costs $49 a month, plus transactions fees that range from 2.1 to 2.5 per cent, plus 30 cents per transaction, depending on which Shopify plan the merchant chooses.
Shopify plans to start offering payment processing for Visa, MasterCard, Discover and American Express as early as Wednesday.
Earlier this month, the company announced it would expand its offerings to include electronic payments online, a move that set the Ottawa company up to battle Internet payment giant PayPal Inc. Previously, sellers would have access to orders, shipping information and inventory positions through their Shopify accounts, then switch to their chosen payment processor, such as PayPal, to track payment details.
Shopify helps to power more than 65,000 online stores. Those stores have processed more than 35 million orders in 100 countries. Sellers using Shopify stores have sold more than $2 billion US in goods since the firm was founded by Tobias Lutke and Scott Lake in 2006. It was initially created as an online snowboard shop, but the pair quickly realized that the real appeal in Shopify was in the easy-to-use code that powered its website and not what it was selling. The pair developed a website that allowed people with no experience in computers or coding to quickly set up online stores.
Today the company employs 275 people in Ottawa and has attracted more than $22 million in venture capital. Its clients include bands such as the Foo Fighters and the Beastie Boys and companies such as Pixar Animation Studios and Tesla Motors.