U.S. markets closed
  • S&P 500

    3,811.15
    -18.19 (-0.48%)
     
  • Dow 30

    30,932.37
    -469.64 (-1.50%)
     
  • Nasdaq

    13,192.35
    +72.92 (+0.56%)
     
  • Russell 2000

    2,201.05
    +0.88 (+0.04%)
     
  • Crude Oil

    61.66
    -1.87 (-2.94%)
     
  • Gold

    1,733.00
    -42.40 (-2.39%)
     
  • Silver

    26.70
    -0.98 (-3.56%)
     
  • EUR/USD

    1.2088
    -0.0099 (-0.81%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • GBP/USD

    1.3921
    -0.0091 (-0.65%)
     
  • USD/JPY

    106.5500
    +0.3200 (+0.30%)
     
  • BTC-USD

    47,230.56
    +839.58 (+1.81%)
     
  • CMC Crypto 200

    912.88
    -20.25 (-2.17%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    28,966.01
    -1,202.26 (-3.99%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Shopify's Shop Pay partners with Facebook and Instagram

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Yahoo Finance’s Alexis Christoforous and Carl Rivera, General Manager of Shop, discuss Shop Pay’s partnership with Facebook.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to Yahoo Finance Live. Shopify is bringing its checkout and payment processing system Shop Pay to some Facebook platforms. Starting today, the Shop Pay option is available on Instagram. It will roll out on Facebook Shops, which is a platform for small businesses, in the coming weeks.

And I'm pleased now to join to the show the GM of Shop, Carl Rivera. Carl, good to see you. So this is a big deal. This is the first time that Shop Pay is being made available outside of Shopify. Tell us a little bit about what the consumer experience will be like on Instagram and Facebook.

CARL RIVERA: Absolutely. We've seen how shoppers have gravitated to Shop Pay as a checkout option on Shopify for years. And we've also seen, at the same time, how, increasingly, these consumers, these same consumers, are moving to social networks to not just seek out connection to friends and family, but really to seek a connection to the brands they care about the most. Social networks have moved from being just about the social connection to social connection and commerce.

And so, in that regard, this is really the natural next step. We're helping those same buyers to now complete their transaction in the way they prefer and the way they love the most, using Shop Pay wherever they go shopping.

ALEXIS CHRISTOFOROUS: You know, one of the challenges I would imagine for Shop Pay and services like yours is keeping the consumer engaged long enough to actually do that transaction while they're on the social platform, meaning if you see something on Instagram and you want to buy it, a lot of folks-- and in fact, I came across a survey. It found nearly 58% of people click away from that platform and go do the transaction directly on that retailer's website. So how do you, in concert perhaps with Facebook and Instagram, help keep the customer there to finish the transaction and hopefully use Shop Pay to do it?

CARL RIVERA: Well, you know, I think it's interesting. When you look at the e-commerce space and specifically the payment space, just how little innovation has happened there over the past many years, and we're taking this part that's central to each transaction, the checkout, and before, it's really only been about a way to facilitate a card payment. And what Shop Pay does is really to expand on that experience, to give you the fastest way to check out, which we've seen increases the conversion rate by 1.7x, a really meaningful number.

But beyond that, we also add a ton of additional benefits. We carbon offset the delivery of the order so that shoppers can shop with a more green mind. And we have this companion app experience that lets consumers keep track of their package each step of the way, from the checkout to their doorstep. And we believe that unbundling and expanding the checkout experience like this makes for a much more engaging and sticky experience.

ALEXIS CHRISTOFOROUS: I know that part of the selling point is that-- to make things faster is that you keep people's credit card and shipping information there on the system so that it's just sort of like a one-click situation when they go to pay. I have to say, I'm one of those people-- call me cynical. I don't like to keep that information on somebody's platform in case there's a hack. So how do you also get through that mentality amongst consumers, those who say, I don't want that information to be stored someplace and perhaps compromised?

CARL RIVERA: Well, of course. At Shopify, we take security and personal integrity-- we pay the highest regard to it. And this has really been key in all of our developments across the entire company, and certainly in this partnership with Facebook. And I think we've done a really good job to make sure that in each step of the way, buyers can understand which company's receiving their information and what that information is used for.

And I think that information, that transparency and directness, is really the best way to overcome that challenge. And then on the piece you mentioned there about the faster piece, I mean, this is not just something that we believe is good. In fact, Shop Pay, when we compare it to regular checkout, it's 70% faster. It's the internet's fastest checkout. And we find that this has really been a conversion increaser.

ALEXIS CHRISTOFOROUS: I know that Shop Pay, in many regards, is still in its infancy, right? I mean, you have 60 million global users. That's an impressive number. But when you look at it next to somebody a little more established like a PayPal, they have 377 million. Is the Facebook-Instagram partnership one of many we can expect, as Shop Pay continues to build the brand and to build consumer trust?

CARL RIVERA: Well, the Shop brand as a concept was really only just launched in April of last year. And since then, we've seen incredible momentum and speed in our product development and adoption of our products, both for Shop Pay as the checkout option, but also for Shop App, the companion experience. In fact, the Shop App companion experience has tracked over 430 million orders in last year alone.

And so when we think about our future, it's really about continuing to maintain and build up that momentum. And going into this year, 2021, we're certainly entering with a lot of speed and momentum. And we're excited for all of the things that are to come.

ALEXIS CHRISTOFOROUS: I'd say so. So, in addition to just the flat out transaction, how else is Shop Pay working with Facebook, perhaps offering different services for social commerce?

CARL RIVERA: When we think about Shop, we really think about these three core values and about going deeper in them, instead of going sort of wide. It's about being the fastest checkout on the internet. It's about making sure that the delivery of those orders made with Shope Pay are carbon offset. And it's about making sure that through the companion experience, the Shop App, buyers can track their order every step of the way, all the way from the checkout to their doorstep. So they never need to worry anymore about, where is my order?

ALEXIS CHRISTOFOROUS: And can you share with us at all what the revenue share situation is going to be like? And is it any different than how Shop Pay works for Shopify? Again, this is your first time going outside of that ecosystem. And when do you expect the partnership with these Facebook platforms to have a material effect, if any, on the bottom line?

CARL RIVERA: Well, Shopify and Facebook have been close partners for many years. And we continue to lead innovation in e-commerce. These are truly the two market leaders in each of their categories. And I think it's that long partnership between the two companies that has enabled this thing to happen, for this thing to come into fruition. And we're certainly excited to think about all of the things that this can lead to, together with Facebook. And we think of this as just one more building block in that relationship.

ALEXIS CHRISTOFOROUS: All right, Carl Rivera, GM's-- the GM of Shop. Thanks so much for being with us, and best of luck with the partnership. We continue to follow you.

CARL RIVERA: Thank you so much for having me.