Shopify signs contracts with Google and Facebook to expand partnership

Shopify is opening its e-commerce checkout system to all retailers that sell through Google and Facebook, Bloomberg News reported .

Shopify Inc will open its e-commerce checkout system to all retailers that sell through Google and Facebook Inc, expanding an existing partnership with the two U.S. giants and marking the first time the Canadian technology company has offered its products to merchants that don't use its platform.

The partnerships are for Shopify to connect with retailers through platforms like Facebook or Google, such as Instagram, YouTube or Google Maps, to enable their shoppers to pay for their purchases using Shop Pay, starting in July for Facebook and later in 2021 for Alphabet Inc.’s Google. Shop Pay is a checkout product that stores users’ information and speeds up online transactions. Right now, retailers can use it through those social media platforms, but they have to be Shopify merchants to use it.

"We hope this momentum for Shop Pay is a step toward becoming the preferred checkout method on the internet," said Shopify President Harley Finkelstein.

From its early days of helping retailers build websites and move their stores online, Ottawa, Canada - based Shopify has expanded to offer a suite of products including shipping, data analytics and small business loans, and now describes itself as a "retail operating system."

Small companies pay a monthly fee to use its core e-commerce software; larger businesses might pay thousands of dollars per month depending on sales volume, and the model has proven to be a huge success for shareholders.

Shopify declined to provide details on what revenue, if any, will be shared between the three companies as part of the arrangement, which will be announced at a later date. The company said more than 1 million merchants sell on Facebook and Google platforms; more than 1.8 billion people log in to Facebook and there are 1 billion shopping sessions on Google every day.

Global e-commerce has surged during the pandemic; market research firm eMarketer estimates that online retail sales will reach $4.89 trillion in 2021. In the U.S., almost 10% of e-commerce is done through Shopify merchants, Finkelstein said.

Shop Pay is the world’s fastest checkout system, with the best conversion rates — meaning fewer online shopping carts abandoned by frustrated consumers, says Carl Rivera, the company’s vice president of product : “You just enter your email address, you get a text message, and you’re done.” It’s easy to track packages, he adds, and all deliveries are carbon neutral through offsets.

Finkelstein said it remains to be seen whether Shopify will open up other products in its suite of subscription products, but there are no plans yet. He said shareholders have proven they support the company's core mission of focusing on building a 100-year company that makes commerce better for everyone.

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