Alternative Finances

Shopify Enters The Merchant Cash Advance Business

Cloud-based omnichannel player Shopify, which is geared toward small and mid-sized businesses, has announced the debut of Shopify Capital, which is billed as a merchant cash advance (MCA) platform for helping business owners grow their operations through reinvestment activities.

The eCommerce firm noted through a press release on Wednesday (April 27) that entrepreneurs typically have stumbling blocks when securing financing through traditional conduits. The differentiator, said Shopify, is that, through this MCA program, cash advances can be tailored specifically through the data that crosses the Shopify platform. The financing can be secured and distributed to the recipient’s account within a few days, said the firm. The product will be offered to merchants who are based in the United States. The platform, formerly in a pilot program, found that merchants used their advances to buy equipment and inventory and also expand their business through increased hiring, new channels created, product distribution and customer activity.

In a statement that accompanied the announcement of the merchant cash offering, William Sulinski, founder of Pistol Lake, stated that, in his experience, with the platform: “Shopify Capital allowed us to invest in our own company without having to borrow money from friends or raise funds from investors, possibly giving up some equity. Working with Shopify for our financing needs was a no-brainer because we've trusted them with our business for over three years as our commerce platform — the core of our business — and they've been the best partner we could have asked for.”

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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