Byline: Hannah Parker

Photo by: Roberto Cortese on Unsplash

Shopify, an e-commerce giant, has added Solana Pay, a decentralised payment protocol by Solana Labs, to its pool of payment options, enabling millions of merchants to use the platform to accept and access crypto transactions.

Experts from Bitcoin Apex  mentioned that Solana intends to add other altcoins to the platform in the coming months, including the meme token Bonk and its native SOL token. Solana Pay is built on top of the layer-1 blockchain, and with the integration, users can connect Solana-centric crypto wallets, such as Slope or Phantom, to settle payments on-chain with merchants using USDC.

Overview

According to a representative of the Solana Foundation, USDC, one of the most popular dollar-linked stablecoins, will be the first payment option to be enabled through the integration as it is more regulated than many altcoins. At the same time, other crypto assets will follow in the future. The Solana Foundation’s Head of Commerce Business Development, Josh Fried, said, “When thinking about this integration, we chose a stablecoin because merchants and consumers think in dollars”.  Fried added, “It creates a much simpler entry point when pricing is in currency consumers and merchants naturally understand”. 

Fried emphasised that the intersection of digital assets and payment solutions was a killer app for crypto, and everyone should be doubling down on it. Fried mentioned that Solana Pay can reduce transaction costs drastically compared to credit card processing fees. The network’s average charge is $0.00025 or a fraction of a penny, while credit card processing fees usually cost between 1.5% and 3.5% per transaction. For instance, in the last epoch, Solana users paid an average transaction fee of 0.000009664 SOL. Fried highlighted that spending with USDC transactions will be settled almost instantly as opposed to most credit cards, which can take several days to clear.

Shopify’s Timeline

Shopify is not a stranger to crypto payment options. According to the Shopify website, it accounts for 10% of total United States e-commerce transactions and a $444 billion global e-commerce market. In February 2023, Shopify launched several blockchain-enabled commerce tools and features to help merchants build token-gating applications. The established feature enhanced users’ experience of their Web3-focused stores hosted by the platform. Tokengating has been in early access beta access mode since June 2022 and is only available to a select number of merchants. Shopify nonfungible token (NFT) merchants could set up their stores to dictate which token holders can and cannot access exclusive products, NFT drops and benefits.

Shopify expanded crypto wallet support by integrating with the sign-in with Ethereum (SIWE) protocol, which was led by the Ethereum Name Service (ENS) and the Ethereum Foundation. In July 2023, Shopify entered the fintech space and launched its business credit card for merchants. The credit card was powered by Stripe, issued by Celtic Bank, and accepted everywhere Visa is accepted. President of Shopify, Harley Finkelstein, said, “The new product marks Shopify’s first pay-in-full business credit card. We designed Credit with the reality of an entrepreneur in mind. We recognised that having smooth cash flow is important for business owners”.

Finkelstein added, “As a business matures, entrepreneurs may find themselves looking for a credit line to maximise their working capital for expected and unexpected expenses”.  In April 2023, Shopify partnered with Melio, an Israeli B2B payments startup. It launched a new bill pay tool for US-based merchant customers to manage their expenses and vendors through its platform. Last year, Shopify introduced Shopify Balance, aimed at helping merchants manage their money and also offer loan facilities. In 2026, Shopify launched Shopify Capital, which helped merchants gain access to working capital. Shopify has integrated with other payment applications such as Coinbase Commerce, BitPay, Strike and Crypto.com.

Solana’s Background

Solana has dealt with downtime issues, which has a cost. In November 2022, Solana’s co-founder, Anatoly Yakovenko, mentioned that it struggled with reliability and uptime issues. Yakovenko said, “That’s not the experience we want to deliver”. Despite this, recent statistics show that network performance is improving. On the company’s website, the blockchain reported 100% uptime in Q2, which means things are improving.

Solana Pay was launched in February 2022 as a peer-to-peer infrastructure that allows merchants to accept and settle payment transactions across digital assets. The Solana ecosystem has over 11.5 million active accounts and has been adopted by big crypto names such as Phantom, Glow and Circle and payment processors like Citcon and Checkout.com. Fried said, “The integration can also help merchants set up loyalty programs with little development. The store can give discounts to Solana Pay users”.

Fried mentioned that a few crypto-focused teams and brands, such as Mad Lads, MonkeDAO and Helius, agreed to integrate Solana Pay on their Shopify storefronts. Fried said that Solana Labs is ideally suited for payments. He added, “There’s no intermediaries, bank fees, chargebacks and holding times”.

Shopify teamed up with Solana Pay to ensure that payments go through fast and allow merchants to settle and accept crypto payment transactions. This integration plug-in with Shopify gives millions of merchants access to crypto.