Shopify Weighs-in on Payments Modernization

Payments Canada recently sat down with André Lyver, Director of Engineering at Shopify, to discuss his perspective on the benefits and challenges associated with adopting new payments technology, the importance of collaboration and the anticipated impact that Real-Time Rail will have on ecommerce merchants and buyers. Read on to find out about what excites him most about payments modernization and the upcoming Payments Canada SUMMIT.

According to a recent Payments Canada study, 81 per cent of Canadian small businesses would be willing to integrate new technologies into their operations. How do merchant needs directly influence Shopify’s decision to adopt new payments technology?
Shopify’s platform is built on the premise of providing the tools for small businesses to sell wherever their buyers are: online, in-store, marketplaces, on social media and in pop-up shops. We’re always looking for ways to help our merchants sell more, whether that is streamlining the checkout process to reduce cart abandonment rates or surfacing the right payment methods at the right time. This is where Google Pay and our other wallet partners play a role in achieving better user experience and a more streamlined payment process. Surfacing the right payment method to the right buyer on the right device or platform is critical to completing a successful sale. For example, we can surface a Google Pay button wherever a checkout button is displayed for Android and Chrome users. This means we can minimize screen clutter and - most importantly for our merchants - maximize the chance of making a sale.

Another consideration is international expansion, which can often be complex for our merchants. When it comes to offering more payment methods, merchants can increase their chances of making a sale if they offer a payment method that their buyers know and trust. The international lens is a factor in which we evaluate our technology partners to make sure that the right technologies and gateways are made available to our merchants and buyers.

How big a role does collaboration play when it comes to exploring and introducing new technology, such as Google Pay, to improve the payments experience?
As a commerce company we’re always working collaboratively with technology partners who have expertise in areas that bring value to our platform - be it payments, fraud detection, shipping or any other important piece of commerce. For instance, catering to an international market means offering buyers local/country-specific payment methods that take into account country-specific rules and regulations. So, collaborating with payments companies with expertise in certain international markets is a must if we want to offer solutions that buyers trust to increase our merchants’ conversion rates.

What kind of business impact do you anticipate real-time payments to have on merchants in terms of process efficiencies, funds accessibility and bottom line savings?
The Real-Time Rail that is being planned as part of the modernization of payments in Canada will reduce the time it takes to pay merchants for sales they make on our platform.  Real-time payments simplifies cash flow for merchants: they will get payouts from sales sooner, which means  they will be able to pay their suppliers more quickly, and run their business more efficiently.

Shopify Capital, while not yet available in Canada, could benefit enormously from a real-time payments platform. For example, if a Real-Time Rail were available in the U.S., merchants who use our Shopify Capital product will be able to access those cash advances in their bank accounts much more quickly, giving them the opportunity to use those funds immediately, for whatever they need.

For buyers, a Real-Time Rail, which combines both security and convenience, could also benefit those who prefer to pay with their bank accounts. Merchants would be able to ship orders as soon as payment is confirmed.

What do you think the future has in store for ecommerce and payments?
In the future, we will start seeing payments and checkout processes becoming invisible. We’re seeing this begin already, with some companies experimenting with autonomous checkouts in their brick-and-mortar stores. And for online, we’ll soon see companies moving from many payment buttons to a seamless and intuitive checkout, with shoppers only seeing the payment option that is relevant to them

Overall, we’ve talked about eliminating checkout in the past and are actively taking steps to do so, for the benefit of both the merchant and buyer. When we launched Shopify Pay last year, buyers across the platform experienced checkout in just one-step, using their stored payment credentials. We have seen increased checkout speeds by 40 per cent and increased sales conversion rates (18 per cent higher than before) for returning customers. For these very reasons we want to continue to improve the checkout experience and gradually eliminate the visible checkout experience altogether.

Why is participating in the Payments Canada SUMMIT and related experiences important?
It’s is wonderful to see the payments community in Canada take shape with the help of Payments Canada. At Shopify, we’re looking forward to spreading that community message through the W3C group and our other technology partners who we are currently collaborating with to launch the new payment request APIs geared to further streamline payment and checkout flows. The goal of the Shopify presentation at The SUMMIT is to raise awareness around what and how web browsers are adopting innovative ways for buyers and merchants to interact with each other on ecommerce platforms when it comes to payments.