While many payments companies have had their hands full contending with the many impacts of the Covid-19 pandemic, payments firms with e-commerce platforms have thrived as consumers flocked to online buying. Shopify Inc. demonstrated Wednesday just how much it’s investing in shopping and payments apps to capitalize on the growth it saw last year.
In what the 16-year-old, Ottawa-based company called a “future that arrived early,” Shopify made significant changes to services within its payments platform, Shopify Pay. It launched a mobile-shopping assistant called Shop, introduced a new version of its point-of-sale technology called Shop POS, and last month extended its fast-checkout service, Shop Pay, to Facebook and Instagram.
The moves are part of a wide-ranging response by the company to what turned into a record year. Gross payments volume in the fourth quarter more than doubled year-over-year to $19.1 billion, Shopify reported, or 46% of the gross merchandise volume sold on its platform. For the full year, gross payment volume came to $53.9 billion, compared to $25.7 billion in 2019.
While much of this growth has been driven by consumers opting for e-commerce in preference to physical shopping, Shopify made it plain it sees a rebalancing coming this year. “Our outlook coming into 2021 assumes that as countries roll out vaccines … and populations are able to move about more freely, the overall economic environment will likely improve, some consumer spending will likely rotate back to offline retail and services, and the ongoing shift to e-commerce, which accelerated in 2020, will likely resume a more normalized pace of growth,” the company says in its fourth-quarter and full-year earnings release.
In response, Shopify is fine-tuning its payments products. It has already launched a revamped version of its point-of-sale technology for physical merchants, Shopify POS. Adding to that offering, it also introduced POS Pro, which supports such services as buy online, pick up in store.
Other new tech for merchants includes Shop, a mobile shopping assistant launched in April that includes Shop Pay as well as Shop Pay Installments, an entry in the fast-growing category of buy now, pay later installment payments.
But perhaps the most ambitious new venture is the effort to make Shop Pay available on Facebook and Instagram. The integration, which the company expects to finish “later this year,” will result in Shopify for the first time offering Shop Pay to Shopify merchants in a venue outside its own platform. Shopify says it has already enabled Shop Pay as a payment choice for Shopify merchants on Facebook that use checkout on Instagram in the United States. It says it will roll out the service “in the coming weeks” to Shopify merchants that rely on checkout on Facebook in the United States.
For the quarter, Shopify registered $977.7 million in revenue, up 94% from the same period in 2019. For the full year, revenue climbed 85% to $2.93 billion.