BigCommerce Partners With Paypal To Improve Monetization
Is it now BigPay vs ShopPay?
Actually no. Bigcommerce announced an optional new service called Bigcommerce Payments which attempts to make things easier for its merchants to transact and do business. It's not really about checkout, mostly.
What is BigCommerce Payments?
It's a new service which integrates a number of standard Paypal functions directly into the BigCommerce UI.
This is not for the .. err.. bigger BigCommerce merchants. How do I know that? The Paypal exec quoted in the release is from "Small Business & Financial Services". So, not Enterprise.
Also the bigger brands don't need a payment system integrated into their commerce dashboard, except for the reason we generally know - it's harder than hell to use Paypal's dashboard. So from this point of view, logging into BigCommerce should feel like a dream comparatively relative to Paypal's maze of identity verification, challenge questions, and support requests.
On the good side:
* Big/Commerce needs to improve its monetization relative to Shop. What SaaS companies have called "attach rate %". Meaning, for every dollar of GMV what is the attach rate of other services that contribute to revenue.
Historically Shopify has seen its revenue to GMV ratio at about 3%.
And BigCommerce while its never really released GMV (of which there are probably two reasons for this - one is lesser scale, and two is all those B2B accounts for which GMV is either slippery or irrelevant) is well known to have mainly a single monetization method -- SaaS. A little merchant services revenue never hurt no one. (Shopify's revenue is 74% merchant services). So there is a lot of room to "run" here.
On the cynical side:
* The prominent mention of Paypal Buy Now Pay Later in this release means that this is probably one of the biggest goals of Paypal in this deal. a huge sell job for that service into BigCommerce and the 5% back on PP BNPL in Q4 means that BigCommerce is going to be pocketing some coin when consumers pay for that thing later.
All told, the playbook for monetizing a platform via payments is out there, and BigCommerce has a long way to go to maximize it.
In another side of Commerce (see what I did there), Walmart followed Amazon's playbook and used it to lead itself to growth. Could BigCommerce play the Walmart in this market? That would be the upside play.
