Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

The Ottawa headquarters of Shopify, on May 29, 2019.

Justin Tang/The Canadian Press

E-commerce giant Shopify Inc. is extending its reach into financial services with plans to offer deposit accounts and payment cards to small-business owners who might feel underappreciated by traditional banks.

The Ottawa-based company expects to launch Shopify Balance in the United States under an early access trial later this year. The small suite of banking products will be built into its popular retailing software.

Shopify’s business bank account is aimed at independent business owners and entrepreneurs, with no monthly fees, access to credit and the ability to track cash flow or pay bills without leaving Shopify’s interface. The premise is that while large and mid-sized companies are well taken care of by incumbent banks, “today’s banking just sucks for small businesses," said Kaz Nejatian, Shopify’s vice-president and general manager of financial solutions.

Story continues below advertisement

“It’s causing trouble for our entrepreneurs, and so it’s our job to fix it,” he said.

Shopify’s own research suggests many small-business owners use their personal bank accounts and credit cards for business, exposing their personal finances to business risk. As an alternative, the company plans to offer a “corporate card” that will allow clients to withdraw funds from Balance business accounts at ATMs, as they would with a debit card, as well as make purchases on credit. It will also offer rewards such as cash back and discounts on business spending, tailored to individual businesses.

By offering business accounts, Shopify is staking out new ground in the race to deploy technology and software to serve an increasing number of small businesses and startups with distinct banking needs. The company already offers loans and cash advances through Shopify Capital, which was launched in the United States in 2016 and expanded to Canada last month. And its financial services team now has a few hundred employees based in cities around the world, including Toronto.

Mr. Nejatian sidesteps any suggestion he’s building a financial technology company inside the merchant software powerhouse. But just as many retailers use its software as an “operating system” to run their business, "we also want to be their financial operating system. We want it to be where they come to check their balance, where they come to pay their bills, where they come to manage their money,” he said.

Shopify announced its Balance product at a virtual event on Wednesday. A day earlier, the company also unveiled a partnership with Facebook Inc. to launch Facebook Shops, a tool to help merchants make custom online storefronts for Facebook and Instagram.

There is no launch date for Shopify Balance in Canada, however, and it won’t be coming to this country in 2020. “We haven’t planned that far ahead," Mr. Nejatian said.

Even as Shopify positions itself to compete with established banks for small-business accounts, it will be dependent on some of those same financial institutions. The software company is not licensed to take deposits and doesn’t want to build a typical bank of its own, so it has struck partnerships with large financial institutions and tech companies – Shopify won’t reveal which ones until Balance launches – and is still looking for more partners.

Story continues below advertisement

One problem the company hopes to solve is the delay merchants often encounter receiving funds from Shopify – they can take days to clear. “We’re very determined to make money land in our merchants’ accounts faster,” Mr. Nejatian said. But he didn’t say how, as Shopify might have to rely on the same back-end payments networks used by its banking partners.

He also said the decision to raise deposits is not intended to be a new source of funding for Shopify Capital. “We’re not launching this to get more deposits to make more loans," he said. “Our intention in building Balance is to build something that is better than a bank, better than the old normal."

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies