Shopify partnered with Coinbase and Stripe to natively enable merchants to accept USDC stablecoin payments globally, without any 3rd party integrations or gateways required. The option to pay with USDC will appear in Shopify's coveted payment dropdown area, right below the credit card option on the checkout page, as opposed to opening a pop-up or taking customers to a 3rd party site to complete their purchase.
USDC is the world's second-largest stablecoin behind USDT, with a $61B market cap — which means there are around 61B tokens in circulation. USDC is issued by the crypto company Circle, which recently raised $1.1B in its IPO on the NYSE. Unlike traditional cryptocurrencies, stablecoins are designed to maintain a stable value by being pegged to a reserve asset like the U.S. dollar, making them more suitable for payments.
Quick Backstory: The original vision of Bitcoin was to function as a currency, but mining fees made it inefficient and expensive to transfer BTC. Also, no-one wanted to spend their BTC because they hoped it would go up in value. As a result, Bitcoin evolved into a store of value, leaving room for stablecoins to emerge as a more practical option for crypto-based payments.
Back to the Shopify news…
By default, all USDC payments within Shopify will be converted to the merchant's local currency, with no foreign exchange or multi-currency fees, and payouts will be deposited into the merchant's existing bank accounted connected to Shopify Payments. Coming soon, Shopify will offer merchants rebates of up to 0.50% on USDC orders, and in the future, customers in the U.S. will receive a further rebate for using the payment method. The stablecoin payments should also clear faster than traditional fiat payments, which move from Shopify to merchants via ACH transfer and take several days.
What about buyer protections, refunds, and chargebacks?
That was one of my first questions, given that crypto is notorious for being a ‘buy at your own risk' transactional medium. However as part of the partnership, Shopify and Coinbase co-developed protocols to handle chargebacks, refunds, and other intricacies of retail payments on Coinbase’s blockchain, Base, which is the fourth-largest blockchain for USDC. The actual transactions will run through Shopify's existing payment processing partner, Stripe. Buyers who shop with USDC on Shopify should be as protected as they are with normal fiat transactions.
Shopify CEO and Coinbase board member Tobias Lütke said onstage at a Coinbase conference last week:
“In our own philosophical framework, we are extremely aligned with everything that crypto stands for.”
USDC payments are currently in early access for select merchants and will rollout to all merchants across 34 countries in the coming weeks.