What Made Shopify Decide to Become a Bank?

Learn more about Shopify Balance and what its capabilities are for clients you may have in common with Shopify.

In May of 2020, Shopify announced Shopify Balance, a platform that will include:

  • Cash flow management
  • Bill pay
  • Expense tracking
  • Virtual and physical debit card
  • "Shop Pay Installments" a financing option for customers of Shopify users

In a statement describing Shopify's intent, GM of Financial Solutions Kaz Nejation shared:

Our goal here isn't to replicate a bank. The goal here is to build financial products for our merchants that are newer and more nimble than what traditional banks offer.

We think legacy banks serve the largest corporations really well. But small businesses or independent entrepreneurs can't get access to the services they want, and the services they can access are insanely expensive.

Read more about the official announcement on BankingDive: Shopify to launch banking services this year for merchants

At the time of the official announcement, the financial partners behind Shopify Balance were not announced.

In December 2020, partners were announced as Stripe and Evolve Bancorp (Memphis, TN).

Shopify will leverage Stripe's new "Stripe Treasury" feature set. Tui Allen, Senior Product Lead for Shopify stated: "One of the biggest barriers for independent entrepreneurs is getting access to critical financial products. Partnering with Stripe allows us to leverage their scale and efficiency, enabling us to focus on empowering our merchants and building Balance to meet their specific needs."

With Evolve, the partnership gives Shopify access to a US bank license. For Evolve, it's an opportunity. CNBC quotes Evolve's Chairman, Scot Lenoir: "We saw fintech coming down the pipeline, and really embraced it as another avenue for us to get deposits. We decided from a strategic standpoint why not embrace that and collaborate with them?"

Stay tuned for more information about Shopify Balance and its success.

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