Payments

Shopify grew its merchant cash advances by 73 percent

  • Ecommerce platforms and payments firms continue to move into lending.
  • Shopify Capital is boosting its volume of merchant cash advances.
close

Email a Friend

Shopify grew its merchant cash advances by 73 percent

Quietly, Shopify is getting serious about financing small businesses.

The ecommerce platform revealed that Shopify Capital issued $76.4 million in merchant cash advances in the third quarter of 2018. That amounts to an increase of 73 percent versus the $44.1 million issued in the third quarter of last year.

In a merchant cash advance, a financing firm purchases a company’s future receivables at a discounted price. In return for a lump sum, the borrower remits a percentage of its daily sales to the financing company. Shopify announced it would enter the alternative lending space in April of 2016 with the launch of Shopify Capital.

Since opening its balance sheet to fund merchants on its platform, Shopify Capital has grown to nearly $375 million in cumulative cash advanced. Along with Shopify Shipping, Shopify Capital is part of the firm’s Merchant Solutions group, which posted revenue growth of 68 percent, to $149.5 million, for the quarter.

Shopify is following in the footsteps of PayPal and Square, two popular payment platforms that have been lending to merchants for years. PayPal Working Capital and Square Capital have issued significantly higher volumes of merchant cash advances. For example, in the most recent quarter, Square Capital facilitated over 60,000 business loans totaling $390 million. And at Money 20/20 in Las Vegas this week, PayPal COO Bill Ready told the audience that PayPal Working Capital has financed more than $6 billion for 170,000 global businesses.

Square announced recently that it would provide purchase financing for Square merchants to offer their customers. This move to consumer financing pits the firm against Affirm and GreenSky, two of the largest competitors in the space.

0 comments on “Shopify grew its merchant cash advances by 73 percent”

Payments

Venmo launches business profiles, takes another step toward monetization

  • The popular P2P app continues to look for opportunities to monetize its popularity.
  • It's launching basic store fronts for small sellers on the app.
Zoe Murphy | July 03, 2020
Payments

With its Shop Small campaign, American Express incentivizes its cardholders to support small businesses

  • Small businesses are suffering in this economic environment.
  • Amex is running a rewards campaign with cash back to support local businesses.
Zoe Murphy | June 30, 2020
Payments, Podcasts

Qolo’s Patricia Montesi on launching a payments company during the pandemic

  • The pandemic has challenged institutions in so many ways.
  • Qolo has publicly launched its all in one solution for B2B payments.
Michael Deleon | June 26, 2020
Payments, Podcasts

Fattmerchant wants to turn software firms into payments companies

  • Software companies have all the SMB eyeballs these days.
  • FIrms like Fattmerchant are helping them turn into payment companies cheaper and more easily.
Zachary Miller | June 24, 2020
Payments

WhatsApp launches payments in Brazil

  • After months of testing, Facebook's WhatsApp launches payments in Brazil.
  • The country's 120 million users will be able to pay merchants and send money to one another without leaving a chat.
Michael Deleon | June 15, 2020
More Articles