Shopify warns merchants not to use Amazon’s Buy with Prime, a competing payments solution to its instant checkout and payment service, Shop Pay.
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Amazon introduced Buy with Prime in April to enable online independent online merchants to extend the convenience of Prime shopping to online stores beyond Amazon.com.
“[W]e are actually thrilled with Amazon making a decision to take the amazing infrastructure that they’ve built because they have a second to none infrastructure and want to share this broadly with small merchants across the Internet,” said Tobi Lütke, founder and CEO of Shopify when asked about Amazon’s Buy with Prime announcement during the company’s first-quarter earnings call.
“And so we are happy to integrate this into Shopify, just in the same way how we integrated what — the infrastructure that Meta built, the infrastructure that Google built and the infrastructure that TikTok built and so on. So this fits perfectly into our worldview. And it’s not nearly as zero-sum as some people make it out to be,” he added.
But apparently, Shopify had second thoughts about allowing its online merchants to add the Buy with Prime button as early as May.
The Information reported that a Shopify spokesperson walked back Lütke’s comments, saying he was only sharing his opinion and the company was still evaluating the new Amazon integration.
Yesterday, a new report emerged by Marketplace Pulse that Shopify merchants trying to add the code snippet to enable Buy with Prime on their sites are being greeted by a warning pop-up that says:
“You have a code snippet on your storefront that violates Shopify’s Terms of Service. This script removes Shopify’s ability to protect your store against fraudulent orders, could steal customer data and may cause customers to be charged the wrong amount.”
The pop-up refers to language in its current Terms of Service (TOS) that states:
“You agree to use Shopify Checkout for any sales associated with your online store. “Shopify Checkout” means Shopify’s checkout experience that allows Customers to enter their shipping information and payment details after adding item(s) to their cart and before placing an order, including checkouts that occur through the Shopify Checkout API.”
Shopify Changed Its Terms of Service in June
The new text prohibiting Shopify merchants from using any other payments service was added to Shopify’s Terms of Service on June 22, 2022.
So, despite Lütke’s initial embrace of Amazon’s Buy with Prime checkout option, Shopify apparently became concerned enough about the impact of Amazon’s payments integration to a point where the company even changed its TOS to prohibit the use.
Actually, the new language disallows the use of any third-party payment options outside the Shopify ecosystem. Before June 22, there was no such restriction in the company’s terms.
While the pop-up warning claims adding the option is a potential security risk, the real reason behind Shopify’s turnabout on the Amazon service may lie in how the ecommerce platform monetizes its business.
All popular Shopify plans include a credit card transaction fee between 2.4% to 2.9% (+ 30 cents) per online transaction.
By comparison, BigCommerce, which was quoted in the original press release by Amazon supporting the Buy with Prime launch, does not include credit card processing fees as part of its store plans.
While Shopify uses safety and security as an excuse to keep merchants from using alternative payment solutions such as Buy with Prime, financial concerns may be a more significant factor.
Amazon also rebuked Shopify’s warning regarding its Buy with Prime service.
In a statement to CNBC, the online retailer said, “We use Amazon Pay to process payments for Buy with Prime orders. Amazon Pay is backed by the fraud protection technology used on Amazon.com.”
“Merchants have complete control over the prices customers are charged,” Amazon added.
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