Shopify, a company that powers storefronts and payments for online retailers, entered the world of offline commerce on Thursday by introducing a credit card reader for bricks and mortar merchants.
The move pits Shopify (“SHOP”) against Square (“SQ”), which has long offered a variety of card readers and software for mostly small and medium-sized businesses, and Revel Systems.
For Shopify, which has 400,000 merchant customers for its retail software, the credit card reader is a way to give merchants the option to manage their sales both online and in stores. “Ninety percent of world’s commerce happens offline,” explained Shopify chief product officer Craig Miller, meaning it made sense for the company to move into the brick and mortar world.
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The small, white reader, which starts shipping in June, is wireless and connects to a mobile phone or iPad or tablet. For each swipe, Shopify charges the merchant 2.4% of the purchase price compared with the 2.75% charged by Square.
Existing Shopify merchants who already use the company’s previous point of sale offerings will pay $29 for the reader but new customers can get the reader for free.
The advantage of using Shopify’s card reader is that you can use the same service for both online and in-store sales, said Miller. “You don’t need to have two systems,” he said. “Small businesses don’t want to have multiple services.” Having one system for sales also means you have a comprehensive view of your sales from both channels, he added.
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But Square has a big head start over Shopify. Recently it said that it had signed up millions of merchant customers for its credit card readers and other software services.
But Miller doesn’t seem to be deterred by the competition. “Facebook wasn’t the first social network out there,” he said. “And we are learning from the other ones in the space.”