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PayPal Holdings Inc. began working with the Canadian e-commerce giant Shopify Inc. two years ago in France, and now the two are bringing the act to the U.S. market. PayPal said early Monday it has agreed to process card transactions for Shopify’s gateway, Shopify Payments, in an arrangement that could generate considerable volume for the San Jose, Calif.-based payments giant.
The new arrangement will start rolling out “in the next few weeks,” said Alex Chriss, PayPal’s chief executive, in responding through a spokesperson to queries from Digital Transactions News. Shopify Payments handled $41.1 billion in total volume in the second quarter, up 30% year-over-year, according to Shopify statistics. Figures for the U.S. market were not immediately available.
The partnership agreement, the parties say, will help merchants manage transactions users initiate through their PayPal wallets. The importance of this move, they say, is that it should improve transaction efficiency and help Shopify merchants manage orders, reporting, and chargebacks.
“We are removing friction and making the experience a lot more seamless,” Chriss said through the spokesperson. “Previously, Shopify merchants that offered PayPal button transactions had to deal with dual managing of orders, payouts, reporting, and chargeback flows. This enhancement creates a single, unified experience for PayPal and Shopify merchants offering both innovative payment options and operational efficiency.”
Some observers who follow PayPal’s recent moves note the strategy behind them, particularly its relevance for PayPal wallet users. “The secret to a successful digital wallet for consumers is the number and variety of merchants that can accept transactions from that wallet,” says Thad Peterson, a strategic advisor at Datos Insights, a consulting and research firm, in an email message. “By adding PayPal, Shopify provides PayPal wallet users with a simple and efficient payment method, and with millions of PayPal users in the U.S., Shopify expands the sales opportunity for their merchants. “
The latest development with PayPal follows a season in which Ottawa-based Shopify has been particularly active in technology partnerships with processors and others aimed at increasing volume. In June, for example, the company announced it had added an AI chatbot feature for its merchants through an agreement with the developer Sendbird Inc. The same month, the big processor NMI Inc. announced what it called an “enhanced” integration with Shopify to ensure that ties with independent sales organizations and software firms meet standards Shopify had recently updated.
For its part, PayPal has recently struck agreements with Adyen NV and Fiserv Inc., as well as the online commerce platforms Adobe Commerce, BigCommerce, and Woo Commerce. The moves are strategic, Chriss said through the spokesperson. “We’re expanding partnerships with acquirers and payment service providers,” he said. “Our collaborations underscore the importance of leveraging combined strengths to deliver enhanced payment solutions and drive growth in key markets.”
