(CTN News) – Online payments are receiving a lot of attention due to Shopify’s role. 58% of Payments users prefer the company’s recent earnings call on Friday (Nov. 3).
This is an all-time high for Shopify, according to its president Harley Finkelstein.
Furthermore, Finkelstein discussed various businesses that recently adopted Payments. Newcomers to the payment processing solution include Anastasia, Banana Republic Home, and HiSmile.
The adoption rate of Payments is higher among Shopify Plus merchants than among regular merchants.
Maintaining a close relationship with its competitors
The old saying goes, “Keep your friends close; keep your enemies closer.”
In August, Amazon announced a new partnership that allowed merchants paying for eCommerce tools to access Amazon’s logistics network. Shopify merchants in the U.S. can now buy with Prime for fast and free delivery. Initially, it was only available to sellers who had been invited, and then it was made available to all merchants.
Last week, Karen Webster of PYMNTS asked if could become a major competitor to Amazon, primarily because Shopify is able to create an ecosystem which simplifies the process for merchants to offer a variety of features and for customers to use them.
Shop Cash added to this notion. While Webster avoided downloading the Shop app for years, she finally downloaded it after discovering an unexpected balance to spend.
It doesn’t seem crazy to me. Despite reluctance to download the app for years, Webster poked around the app and wondered how to redeem my money.
As Webster pointed out, Shopify’s buy buttons on the internet have a conversion rate over 15%, which is 35% better than Amazon’s.
The Benefits of Shopify Payments for Merchants
Two primary reasons seem to be driving merchants to choose Shopify Payments over other payment providers, according to Shopify.
Larger brands moving are looking to modernize their technology stack, including their payment provider. Their integrated solution with Payments allows them to modernize their business.
Secondly, even businesses with existing agreements with other payment providers are switching to Shopify Payments. It is possible that as these existing contracts expire, merchants will see Payments as a more cost-effective and functional alternative.
An analysis of Shopify’s numbers
As a global leader in commerce, Shopify’s third-quarter results demonstrate our progress, Finkelstein said. Our ability to provide merchants with innovative product solutions has not only built strong trust with our merchants, but has also positioned for sustained growth and profitability in the future. Our unified commerce platform gives our merchants the tools they need to succeed during the busiest shopping season of the year.”
According to Shopify, its gross merchandise volume (GMV) increased to $56.2 billion in the third quarter. When adjusted for the sale of logistics businesses, total revenue reached $1.7 billion, a 30% increase over last year.
In addition, Merchant Solutions’ revenue grew to $1.2 billion. Over 58% of the GMV processed during the quarter was made up of gross payments volume (GPV), which amounted to $32.8 billion. Monthly recurring revenue (MRR) for Subscription Solutions reached $141 million, a 32% increase from last year. With a gross margin of 52.6%, gross profit increased to $901 million.
From a loss of $346 million during the same period last year, operating income rose to $122 million this year. As of September 30, Shopify reported positive free cash flow of $276 million and had cash and marketable securities totaling $4.9 billion, with net cash of $4 billion.