Shopify continues to expand its functionality for one-stop-shop appeal, and to broaden its addressable market of SMBs. The latest move in this effort comes with its extension into billing. Known as Shopify Bill Pay, it helps SMBs manage expenses and vendor payments right within the Shopify dashboard.
This functionality primarily focuses on accounts payable – a traditional pain point for SMBs who want to spend their time winning and fulfilling new jobs, rather than accounting. It all resides in a new bill pay tool from Israeli B2B payments startup Melio, representing Shopify’s choice to partner rather than build.
Panning back, fintech and eCommerce go hand in hand so this move makes sense in terms of feature adjacency. But from a strategic standpoint, this is more about extending Shopify’s stack and broadening its customer base. Specifically, it brings Shopify closer to service-based SMBs (more on that in a bit).
Convenience & Flexibility
Zeroing in on one benefit noted above, the new bill pay feature’s integration its biggest selling point. Shopify wants to give merchants a place within their current dashboard to manage accounts payable so that it’s not a disjointed experience. This is a classic one-stop shop play for SMB convenience.
Beyond convenience, Shopify is going for flexibility. The company notes that it will offer its merchants the choice of payment sources, such as bank accounts, ACH transfer, a Shopify balance, and credit or debit cards. It even offers the ability to pay with credit card when a given vendor doesn’t accept it.
Also under the heading of convenience and flexibility, the new bill pay functions let SMBs schedule payments. This can be a useful tool for SMBs that have tight cash flows in terms of payments coming in and out. Precisely planning when a given payment will land can help avoid conflicts and overdraws.
Lastly, the new bill pay tool has analytical functions so SMBs can evaluate their vendor mix and gain strategic insights accordingly. As for cost, the bill pay feature is free for merchants to use, but will carry “minimal fees,” that are associated with some payment methods, such as credit cards.
As additional background, Shopify is already well-traveled when it comes to fintech. Its initial value proposition is all about easy online payments (via Stripe). In 2016, it offered Shopify Capital to address merchant lending needs. Then last year, it launched Shopify Balance for additional flexibility.
Adjacent & Logical
Back to Shopify’s expansion to service-based businesses, the company from the start has reduced friction in eCommerce. That includes helping merchants set up the front end (stores, product pages, etc.) and the back end (shipping, logistics, payments, etc.). Now it wants to do the same for services.
The biggest difference in these target markets for Shopify is that one happens online and the other typically happens offline. So while it isn’t technically in the realm of eCommerce, as traditionally defined, Shopify wants to bring the “e” in eCommerce to some functions of service-based businesses.
And the best way to do that is to streamline operational and administrative tasks. Here, billing, payments, and job management are good places to start. Other logical integrations include scheduling, CRM, and email (re-marketing). Shopify already has many of these pieces in place, as we’ve examined.
Panning back even further, all the above is pursuant to finding new revenue growth as Shopify matures. It has the foundation for a variety of services given its core website and eCommerce functionality. Now it’s all about integrating adjacent and logical functions that can boost both ARPU and customer retention.
