Gary Schwartz

In a world where data is the ultimate currency, the corner bank is becoming less useful to the struggling SMB. Enter embedded financial ecosystems.

We know that commerce leviathans (Shopify, eBay, Amazon) have begun servicing mom-and-pop main-street with more than a storefront in the cloud. And we know that lending products are the gateway drug … but there is far more in the works.

So the story goes … Covid shifted our business focus away from bricks and mortar and into the cloud store. Yes, banks provide some relief but the old-world approval process with the branch manager for additional top-up was hard if not impossible. Step in eBay (CEBS), Amazon Lending and Shopify Capital’s ML models which provided decisioning in real-time based on transaction data.

Since 2016, Shopify Capital has provided a whopping $2 Billion USD to SMBs. Q42020 saw nearly 100% increase over Q42019.

Just as deposits are the first rung in the bank’s service ladder, merchant cash advance is the first rung in an embedded financial ecosystem. Shopify Capital begets Shopify Pay Instalments (BNPL) begets Shopify Balance touted as “a free money management account and card that lets you skip the bank.”

“You can check-out any time you like,
But you can never leave!”