Shopify's migration deeper into payments has taken a turn into B2B transactions, highlighted by a partnership with the supply-chain e-commerce firm Balance.
"Old industries are moving online, industries like steel and food services. These industries were offline by nature but need to use e-commerce now," said Bar Geron, co-founder and CEO of Balance.
Shopify on Thursday launched an integration with Balance that will support a range of checkout and financing options for sellers on Shopify's platform. Shopify is expanding its role as a B2B services company as more companies move their procurement online, while consumer-oriented products tied to checkout — such as buy now/pay later lending — make the leap into business transactions.
"Business operators are used to the consumer experience, and there's an expectation of that in other areas of payments," Geron said.
Balance's app will enable Shopify's B2B merchants to offer a single-click payment option through a centralized platform, with a user experience that resembles shopping, ordering and paying through a consumer e-commerce site. Balance will process payments, manage refunds and provide a view of all transactions, buyers and credit limits for the merchants' Shopify dashboards.
Merchants that sell on Shopify will connect their Shopify store to Balance, with new buyers qualifying for financing when they place items in the cart. Balance pays merchants the full amount of an invoice up front and collects payments from the merchants' customers.
The Balance app will additionally enable merchants to offer payment deferment for up to 60 days, with payment by ACH, credit card or check.
The concept is akin to buy now/pay later lending, only for business-supply procurement and other expenses. Institutions such as Silicon Valley Bank, for example, are expanding BNPL to business payments, in SVB's case through a partnership with
"It's very similar to BNPL," Geron said, adding installments would be another option beyond traditional financing for supply-chain transactions. "Financing is also part of the way in which businesses are used to transacting with each other."
These firms are not accustomed to conducting business online, and that presents an opportunity for payment companies to provide enabling services and to help businesses scale the digital learning curve. Global B2B payments volume is expected to reach $51 billion in 2022 and $54 billion in 2023, according to
And industrial firms are increasingly migrating functions online to cut overhead and save time. Some industrial categories are on pace to expand online sales from near-zero to 60% over the next five years, according to
"There is a mix of payment options for business to business payments, including checks, debit cards and direct debit, and all of that can get messy," Geron said.
Shopify, which did not provide comment for this article, has been expanding both its product range and payment technology in recent months.
And Shopify in September launched POS Go, a mobile device that expands Shopify's mobile point of sale to add more payments data and links to merchant devices. POS Go builds on top of point-of-sale hardware that Shopify has offered for about five years, enabling checkout to take place anywhere inside a store. Part of the strategy at Shopify is to maintain relationships with e-commerce merchants as they migrate offline.
Shopify also supports Apple's Tap to Pay, which allows merchants to use iPhones to accept payments without add-on hardware.
"Payment companies must ensure that the technologies developed for consumers are offered to businesses to get the best return on their investments," said Brian Riley, a director at Mercator Advisory Service.
Balance is also expanding its reach into the e-commerce platform market. It has a similar integration with Magento, and plans to integrate with B2B e-commerce platform BCommerce in the near term, offering options such as real-time processing for shopping and B2B payments.
"Faster pay options, for example, work both in the consumer and small-to-medium business sectors, as does BNPL," Riley said. "Offering the options provides better leverage on the investment and provides options that work in both worlds."
