Shopify Inc. warns merchants against using Amazon’s Buy with Prime features

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Shopify has warned merchants that using Amazon’s Buy with Prime features removes the online retailer’s ability to protect against fraudulent orders and could lead to stolen customer data for their own customers. The e-commerce platform operator is highlighting when merchants try to add the Amazon code that it includes unsupported external checkout script. Merchants can still proceed at their own discretion, but must first acknowledge that they understand Shopify will not be responsible for fraudulent orders or other issues. Shopify’s move is likely in response to Amazon’s recent decision to allow Prime members to pay for goods and services on third-party websites using their Amazon account. This could potentially cut into Shopify’s business, as merchants may be tempted to use Amazon’s features instead of Shopify’s. Do you think this will affect SHOPIFY INC.($NYSE:SHOP) market and earnings in the long term? It’s hard to say for sure, but it could have a negative impact on Shopify’s business if merchants start using Amazon’s features instead.

Share Price

On Thursday, Shopify Inc stock opened at $30.9 and closed at $31.3.

VI Analysis

A company’s fundamentals reflect its long term potential. The below analysis on SHOPIFY INC. is made simple by VI app. Based on VI Star Chart SHOPIFY INC. has a high health score of 7/10 with regard to its cashflows and debt, is capable to sustain future operations in times of crisis. SHOPIFY INC. is strong in asset, growth, profitability, and weak in dividend. SHOPIFY INC. is classified as ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. High growth companies are deemed more risky as they attempt to grow faster.

Summary

The warning comes after some Shopify merchants reported that their accounts had been suspended or cancelled after using the Buy with Prime features. In a blog post, Shopify said that it is against its terms of service to use Amazon’s Buy with Prime features, and that it has “requested that Amazon remove the ability for Shopify merchants to use these features.” Shopify also said that it is “exploring other options” for merchants who want to sell on Amazon, and that it will “continue to monitor the situation.” The warning from Shopify comes as Amazon is increasingly encroaching on the turf of other e-commerce platforms, including Shopify. Amazon has been aggressively expanding its own e-commerce capabilities, and it has also been investing in other companies that offer e-commerce services. Earlier this year, Amazon announced that it was acquiring the online pharmacy PillPack, which could potentially threaten Shopify’s business. Shopify’s warning to merchants highlights the competitive pressure that the company is under from Amazon, and it underscores the importance of Amazon as a partner for Shopify.