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Shopify Integrates Solana Pay for USDC Payments — Who Benefits the Most?

Published August 25, 2023 4:53 PM
Omar Elorfaly
Published August 25, 2023 4:53 PM

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Key Takeaway

  • Shopify integrates Solana Pay into its platform.
  • A Solana executive believes payment apps are the future of crypto.
  • Crypto payment promises lower transaction fees than regular credit cards.

Stablecoins, a form of crypto tokens pegging their value to the US Dollar, have entered the commercial payment world. 

Popular e-commerce platform Shopify announced the integration of Solana Pay into its platform, which will allow customers to use Circle’s USDC, one of the most popular stablecoins with a market cap of $25.9 billion , to make payments. 

A Solana executive told  TechCrunch the integration means the introduction of crypto’s “killer app”.

Commercial Crypto

During his conversation with TechCrunch, Josh Fried, business development and partnerships director at Solana Foundation, retraced Solana Pay history.

As the second-most successful stablecoin after USDT, USDC is being introduced onto Solana Pay as the first payment option on Shopify.

Fried stated that the decision to choose USDC was intentional, as many vendors would prefer a token closely related to the fiat USD. However, Fried also mentioned that Solana is considering the addition of more cryptocurrencies to the platform in the future, including SOL and BONK.

Some argue that Solana has more to gain from integrating with Shopify, given that the e-commerce platform hosts 10% of total U.S. e-commerce and is involved in $444 billion worth of global economic activity, according to the company’s website.

Fried, however, has a different perspective:

“Some people argue that the killer app for crypto hasn’t arrived, but it has: it’s payments,” Fried said. “[Everyone] should be doubling down on this.”

He refers to the transaction fees associated with paying using crypto, as opposed to the traditional credit card route.

Traditionally, credit card purchase fees range between 1.5% and 3.5%. In contrast, the average cost per transaction on Solana’s blockchain is $0.00025.

Ending Normal Commerce?

Curiously enough, Shopify launched its credit card  for merchants in July. The platform also has several blockchain-enabled commerce tools. Shopify also uses Coinbase Commerce, Strike, Crypto.com and BitPay.

But, Fried firmly believes Solana’s blockchain is “perfectly suited for payments,” for its capability to remove intermediaries, shrink transaction fees, and facilitate chargebacks.

“You need speed at the point of sale for merchant payments. No one wants to sit on a website to wait for wallet transactions. Similarly in a point of sale in a store, can you imagine waiting three minutes for your payment to go through? No one wants to do that.”

Crypto is undergoing major transformations, whether it’s Wall Street making significant entrances into the sector with big announcements, or the constant shifts in views on crypto tokens, such as Bitcoin, stablecoins, and Central Bank Digital Currencies.

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