It was all good-natured competition, until it wasn’t. E-commerce selling platform Shopify has put on its boxing gloves to brawl with the heftiest heavyweight in its industry over checkout buttons. Specifically, Shopify doesn’t want to see Amazon’s shiny new “Buy with Prime” option on its sellers’ stores, and it’s fearmongering with popups sent to sellers. The messages say that integrating Amazon’s payment option is a violation of its terms of service that could have dire consequences for sellers’ businesses — fraud, shipping delays, data theft, incorrect charges.
The smaller company has recently started telling its clients that attempting to add the Buy with Prime button to their stores could allow Amazon to steal their customers’ data, according to a Thursday report from e-commerce intelligence firm Marketplace Pulse. But that’s not all. In Shopify’s message — which was conveniently shown to sellers trying to add the HTML code for Buy with Prime on their sites — Shopify said that using Amazon’s service could lead to fraudulent orders or to customers receiving incorrect charges.
“You have a code snippet on your storefront that violates Shopify’s Terms of Service,” Shopify wrote in its message to sellers, as in the screenshot obtained by Marketplace Pulse. “The script removes Shopify’s ability to protect your store against fraudulent orders, could steal customer data and may case customers to be charged the wrong amount.”
Shopify and Amazon have recently started competing more directly with the debut of Amazon’s Buy with Prime and Shopify’s acquisition of Deliverr, a startup fulfillment service. When customers choose the Buy with Prime checkout option, an order is created with Amazon and fulfilled from Amazon warehouses. Meanwhile, when shoppers use other payment methods, such as Amazon Pay, Affirm, or Checkout.com, the order is placed via Shopify and is fulfilled from whichever warehouse the merchant is using. All in all, it’s a bit confusing, but one way makes more money for Amazon, the other for Shopify.
Shopify’s message lays it on thick: certain features might fail if Buy With Prime gets added, it says, including discounts, order accuracy, fulfillment workflows, payment settings, and carts, would “work as intended for your store once this is enabled.”
Amazon launched Buy with Prime back in April. The direct-to-consumer service allows Prime members to check out on individual merchants’ websites using Amazon’s Buy with Prime widget. Checking out with Buy with Prime lets members enjoy Amazon service staples, such as free delivery, free next-day delivery, and free returns.
Shopify confirmed to Gizmodo that sellers who integrate Buy with Prime into their stores receive a pop up that lets them know they are violating its terms of service. Sellers who go on to integrate Amazon’s checkout option are not kicked off the platform.
“We have Terms of Service in place to protect our merchants, and violations may trigger a warning in the effort to provide full transparency to merchants,” a Shopify spokesperson told Gizmodo on Friday.
Amazon Says Buy with Prime Doesn’t Steal Data or Enable Fraud
Amazon, for its part, told Gizmodo on Friday that it does not steal data from Shopify customers and protects data obtained via Buy with Prime using high security standards. The tech giant explained that it uses the data from Buy with Prime — which, let us remember, no customer is forced to use — to improve the product for sellers and shoppers.
Regarding Shopify’s claims that Buy with Prime may facilitate fraudulent orders, Amazon pointed out that that it uses Amazon Pay, its payment processor equipped with the same fraud protection tech used on Amazon.com, to process orders made using Buy with Prime.
Instead of slamming Shopify for making these claims, Amazon, whose PR department is known to be aggressive, chose to answer diplomatically.
“We developed Buy with Prime to serve Prime members wherever they shop and empower merchants of all sizes wherever they choose to sell,” an Amazon spokesperson told Gizmodo. “We hope that all ecommerce providers will put customer experience and merchants’ success first by allowing them to take advantage of more tools.”
Shopify Is Ready to Fight Amazon for Its Sellers
Shopify was friendly to Buy with Amazon at first. In May, Shopify’s CEO Tobi Lutke said his company was “happy” to integrate the feature. Shopify had already allowed its sellers to use Amazon Pay, the tech giant’s payment processor, in its U.S. online stores and still does.
“This fits perfectly into our world view,” Lutke told investors at the time. “And it’s not nearly as zero-sum as some people make it out to be.”
Yet, Shopify’s latest move against Buy with Prime signals that it’s ready to fight Amazon over sellers, which are Shopify’s main source of revenue. Juozas Kaziukėnas, founder of Marketplace Pulse, which originally spotted Shopify’s message about Buy with Amazon, explained that Shopify wants to ensure it doesn’t lose transactional fees to Amazon.
“Shopify is playing defensive by trying to slow down Buy with Prime’s growth. Not only would Shopify be losing transactional fees for orders placed with it, it wants Shop Pay [its own checkout service] to be the front and centre quick-checkout solution,” he pointed out.
“Shopify was not a consumer-facing brand for a decade, but they are quickly changing that with the Shop app, Shop Cash rewards, Shop Pay, and more,” Kaziukėnas said. “Shopify wants shoppers to think of Shopify when shopping on their stores, not Amazon.”