Shopify announced yesterday that merchants can now accept stablecoin payments through a collaboration with Coinbase and Stripe. The feature requires no action from merchants unless they prefer receiving payouts in the USDC stablecoin rather than their local currency. An interesting aspect of the alliance is joint work involving Coinbase and Shopify on a smart contract or “e-commerce payment protocol” that mimics the two step card process of authorize and capture.
Shopify is an international platform and the announcement positions this as enabling cross border payments “with no foreign transaction or exchange fees” where the merchant will receive their local currency by default. We’d note that unless the merchant receives dollars, to get another currency will necessitate a foreign currency transaction presumably processed by Stripe. With foreign currency, the exchange rate often has a bigger impact on costs than fees.
On the one hand, cross border emerging market payments are viewed as a killer mainstream app for stablecoins. The big question is whether e-commerce payments will be the second one, given there’s far more competition from cards and other payment methods. The fact that Shopify partnered with Coinbase and initially only accepts USDC on Base (founded by Coinbase), points to it catering to existing crypto users at this stage. USDC issuance on Base amounts to $3.6 billion or around 6% of the total stablecoin’s value across all blockchains.
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