Shopify Capital

[fisoncustomrods]

Shopify's partnerships with banks allow for the provision of credit and capital products, a step appreciated by many. However, this process can quickly become less efficient and lead to an increase in defaults. As an owner of a space within the Painted Tree, I am provided with an annual rental space and a convenient checkout system for tenants. Monthly payouts are made through a standard check process. Our primary account is held with a local bank, which is where all sales within the Painted Tree are processed. Due to my participation in both the Capital Program and Credit Card Program, I am now required to hold sales as draft orders until the end of the month. This is because both programs offer only one option for paybacks, either through Shopify or through automatic drafts from my local bank. Transferring or adding funds to my Shopify Balance account can take up to four days through ACH, and transferring funds from the balance also takes a significant amount of time.

What happens is the capital payment is debited sooner than funds from sales credited. And if I run a sale that came through the Painted Tree, that capital payment comes out well before funds can be transferred from our local bank, which is why I stack draft orders for month-end. .

The credit card program is beneficial for merchants, but also has its drawbacks. While requiring full payment of outstanding balances each month is acceptable, using it for inventory creates a delay in receiving funds. This delay can lead to the card being locked and a portion of the sale going towards credit payments. 

Shopify Capital group should recognize these shortcomings. Customers should have the choice to select between a Shopify balance account and their local bank account, but as far as I know, this option doesn't currently exist. It's either one or the other.

As a tenured employee of 40 years of experience as a commercial lender, I view Fish On Custom Rods as a secondary business. I am grateful for Shopify's offerings and hope for further improvements in merchant-friendliness.

Much appreciated,

Joey

Fish On Custom Rods, LLC

[ChrisLikesCode]

It seems like the main issue is a cash flow problem due to the timing of payments and fund transfers between Shopify’s financial services and the local bank you use for your rental space.

I've heard from other's that the timing of Shopify's payments are also not ideal and a bit slow. I agree that if Shopify can improve here it would create a lot of value for customers. 

[Imogen]

Hi there, @fisoncustomrods. Thanks for taking the time to reach out to the Shopify Community Forums here with your feedback and use case! My name is Imogen. It's good to meet you!

I'm absolutely happy to pass along your feedback here to the appropriate folks internally for their consideration. Before doing so, I really want to make sure that I'm clear on what you've been experiencing so I can pass along this thread to the Team, as well as summarize the feedback in a concise way for them. Do you mind helping me confirm my understanding of the situation?

• To confirm, the payments being made back to Shopify Capital are coming from your bank account that you mentioned?
• When you say 'Credit Card program' - are you referring to Shopify Balance?
• You mention that 'the capital payment comes out well before funds can be transferred from your local bank - are these funds you're transferring from your bank going to your Balance Card? Are you referring to payouts that are being delivered to your bank account that you're then transferring to balance? (I just want to really cement my understanding of the workflow you're experiencing)
• Can you provide me with some more context around what you mean when you are referring to when you say 'using it for inventory creates a delay in receiving funds' - are you referring to transfers from your bank account going to your balance card?

My goal here is to make sure myself (and and other members of my Team who may see this thread for feedback) have a picture that is as clear as possible around what you're experiencing. I apologize if my questions are a bit redundant, but I want to stress to you that my goal is to understand the process you're outlining the best I can so I can make sure accurate feedback gets passed along on your behalf! I'd rather make sure that the information I'm sharing with folks on your behalf is accurate as opposed to incorrect, and not accurately representing your feedback and use case. Thanks, @fisoncustomrods!

[fisoncustomrods]

• To confirm, the payments being made back to Shopify Capital are coming from your bank account that you mentioned? The Shopify Capital payments come from my Shopify Balance currently. The issue I raise is, I don’t have an additional option to choose. 
• When you say 'Credit Card program' - are you referring to Shopify Balance? Yes the Credit Program with Shopify under my Finance tab
• You mention that 'the capital payment comes out well before funds can be transferred from your local bank - are these funds you're transferring from your bank going to your Balance Card? Are you referring to payouts that are being delivered to your bank account that you're then transferring to balance? (I just want to really cement my understanding of the workflow you're experiencing). When I was using my local bank the Shopify Capital Payment came out several days before receiving proceeds from the sale. I opened the Shopify Balance Account thinking that would resolve the issue with my local bank. But it caused problems with PayPal. Because funds would go directly to PayPal, then I would have to transfer to my local bank account. The team you mentioned can look at my Shopify Credit or Credit Card, Capital Payments, and one Pay Out that was a refund to see “failed attempts”. These failed attempts are solely based on funds from sales chasing the fees and payments of the Capital and Credit program. I accrued insufficient charges, some reversed, with my local bank. 

I would enjoy a conference conversation about all of this someday. I believe it would make a lot of sense.

Joey

[Imogen]

Thanks for following up with that clarifying information, @fisoncustomrods! I appreciate it immensely!

I've gone ahead and passed along this thread and your feedback to the appropropriate folks here at Shopify for their consideration. I can't advise on what specifically may result from sharing your feedback, but you can trust that it's going to get seen by the folks that need to see it!

[fisoncustomrods]

In short can I establish an additional outside banking link, if so how and where? I would like to have external options to choose from to route funds into the Shopify balance. A great example is when a customer pays with PayPal. Those funds go through Shopify into a Paypal account, meanwhile I have capital payments being debited from my shopify balance.