Shopify adds direct bill payments to be a one-stop fintech for merchants

Image credit: Shopify

Shopify has teamed up with Israeli B2B payments startup Melio to launch a new bill payment tool designed to allow US-based merchant customers to manage their expenses and suppliers via its platform.

It’s another step in Shopify’s plan to span the intersection of fintech and commerce, noted Shruti Patel, global head of merchant partners and monetization at Shopify.

The reasoning behind the new feature plays along with the notion that if sellers can spend less time on tedious tasks like consolidating their invoices and paying bills, they can spend more time focusing on growing their business. That too was driven in part by merchants asking about money-moving capabilities, Patel told TechCrunch in an interview.

“W“I’ve been on the fintech journey since we introduced payments back in the day, powered by Stripe,” she said. “That gave us tons of insight into our payments data. And then we came out and offered Shopify Capital in 2016, which was designed to meet our merchants’ micro and macro lending needs. And then last year we introduced what we call Shopify Balance, which was almost like a money management tool.”

Shopify intentionally worked to build the bill payment functionality into their existing product – and in the same place where their merchants operate their businesses – because they wanted it to be a fully integrated accounts payable solution in their store management.

“If you look at how banks offer and financial institutions offer bills today, it’s quite a rerouting experience,” Patel said. “…But a lot of these experiences are pretty broken because they just connect to a bank account and enable them to use it through that one payment method.”

By contrast, she said Shopify sellers will have a choice of funding sources such as a bank account, Shopify balance, credit or debit card or an ACH wire transfer. They can even pay by credit card even if a vendor doesn’t accept them.

“It’s not just the cost option of which payment method and how to choose it, but also the speed at which we allow them to schedule payments,” Patel added. Shopify, for example, can allow payments up to four days earlier than a traditional bank, she said. Sellers also have the option to schedule payments in advance.

The bill payment feature is free for its merchants, but there are “minimal fees” associated with certain payment methods such as a credit card, according to Patel.

“One of the reasons we wanted to do this for our sellers is to go back to some of the feedback we’ve heard, which was how much bill payment is a pain point, especially for smaller sellers who can’t afford very expensive subscription plans,” she said.

Internally, the ability to offer bill payment will give Shopify insight into how they spend and which suppliers they use.

“And today, the banks have that insight, but they don’t really act on it, because they don’t run showcases for the small businesses,” Patel said. “What we want to do is have that data help us generate more revenue for our sellers.”

Shopify declined to say how many sellers it has in the US, noting only that it works with “millions of sellers” overall.

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