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How FinTech is Helping Future-Proof Life for Amazon Sellers

Updated August, 2023 – Walmart, Shopify, Square, and Amazon are on the FinTech train. Here’s how Fintech can help you scale your own ecommerce business!

  • August 25, 2023
  • /
  • Chuck Kessler

Thanks to the emergence of mobile technology, the influence of social media, and the power of all-in-one marketplaces, ecommerce has exploded in the last several years. 

Another big, sometimes unnoticed catalyst of ecommerce growth has been the rise of FinTech, and the ecommerce financial solutions that it makes possible.

What’s All This Talk About FinTech?

FinTech (or Financial Technology), refers to cutting-edge software and emerging technology that can supercharge the way that you use financial services.

It includes online banking applications and money transfer apps like Venmo and Zelle, as well as exciting new ecommerce funding options. FinTech makes purchases as easy as flashing your Apple watch “wallet” or simply using a credit card issued by a traditional bank.

There’s a very good chance that you’ve already used some aspect of FinTech in your everyday life. I have a troubling mental image of my grandfather spinning in his grave each time I authorize a business to access my personal bank account with the watch I wear on my wrist.

This form of FinTech is said to be “embedded” into the commerce ecosystem. Even though Shopify, Amazon, Visa, American Express, and Mastercard are not purely FinTech companies, it is a large part of how their businesses run (and make money).

Fintech’s Recent Marketplace Challenges

Today’s cryptocurrency troubles and the current recession have created ripples throughout the financial sector. 

Global fintech funding fell to $52.4 billion in the first half of 2023, down 17% from $63.2 billion in H2 2022. Still the US received the majority of interest and investment. Just this month (August, 2023) a new U.K. investment fund backed by Mastercard, Barclays and the London Stock Exchange Group with up to $1.27 billion in capital launched to back growth-stage financial technology companies.

There continues to be a lot of talk about the many different ways that the rapidly growing Fintech sector will continue to influence business in the next year.

For those in the know, Fintech is still hot. 

FinTech companies have launched applications for everyone from individual Amazon FBA (Fulfillment by Amazon) sellers, to the billion dollar companies “aggregating” Amazon businesses.

Not to be outdone, Amazon has hopped on the Buy Now Pay Later (BNPL) bandwagon with its new partnership with the financial services company, Affirm.

To make this possible, our internet needed to evolve.

What is Web 3.0?

The first incarnation of the World Wide Web – often referred to as Web 1.0 – dates back to the 1990’s and early 2000’s. It can be quickly characterized as the internet of blogs, rudimentary message boards, early web portals and internet service providers such as AOL and CompuServe.

Then, as everybody is well aware of, came Facebook, Twitter, and YouTube. That’s Web 2.0. It’s most commonly thought of as the point where users began creating and posting their own content. They were no longer just internet “passengers,” they wanted to be in the driver’s seat! 

Welcome to the Future 

Now, there’s a lot of talk about Web 3.0. That’s the name that some futurists and technologists have attached to a very different version of the internet. Even though cryptocurrency has taken its lumps lately, and blockchain is something very lightly understood by most, this idea of an internet “owned by the (individual) builders and users, orchestrated by tokens.”

Everyone on the internet is trying to gain more control over their content. Web 3.0 is tilting the field in favor of the “producers” by decentralizing the internet and rebuilding it using blockchain.

What is it going to look like, really?

How about decentralized social networks, “play-to-earn” video games and an increased emergence of NFT platforms. If you’ve been following the latest innovations to ecommerce, you’ll see why many think that online selling is helping drive this move to Web 3.0.

The Gamification of Ecommerce

If you’ve been selling on Amazon for any time at all, you know to expect innovations coming from China. Over the last few years, Chinese ecommerce pros have made huge advances in the “gamification” of purchases. 

Using this model, shoppers take part in virtual exhibitions and performances, then are able to seamlessly make their purchases on the platform itself through branded games and quizzes that blur the line between commerce and game play. 

Shein, the Chinese fast fashion retailer founded in 2008, is well versed in this exciting new form of ecommerce, and recently passed Zara and is fast approaching H&M as one of the world’s biggest fashion brands. Shein is known for its viral social media tactics, including a strong video presence on both TikTok and YouTube.

Don’t like the idea of balancing awkwardly on one leg in a tiny changing room? Snapchat users can now try on clothing and accessories virtually with technology that responds to your own specific physical dimensions.

FinTech Money is Helping Fuel Ecommerce

FinTech’s focus on ecommerce isn’t brand new. Still, the amount of money that is flowing into the global marketplace has begun to grow exponentially. It’s also helped entrepreneurs with scaling their Amazon FBA businesses.

Several years ago, the financial services firm Payoneer introduced a program called Capital Advance, which gives advances up to $500,000 to Walmart and Amazon sellers.

In 2021, SellersFunding (now SellersFi) secured $166.5 million in a combination of Series A equity funding and a credit facility to continue the development of their ecommerce-specific technology and payments platforms.

Later, Amazon, and Lendistry, an established minority-led Community Development Financial Institution (CDFI), rolled out a joint pilot program. By providing U.S.-based Amazon online sellers access to short-term loans of up to $100,000 at competitive and affordable rates, the program’s goal is to create growth opportunities for urban and rural small businesses in socially and economically distressed communities.

Embedded Finance is Helping Amazon Sellers Connect the Dots

Embedded finance makes it possible for companies to offer consumers credit without having to leave their platform. That’s a critical innovation.

You’ve probably been offered the opportunity to “pay as little as $100/month or 0% APR with xxxx.” Embedded finance includes payment platforms, card payments, lending, investments, insurance and banking. All these innovations make scaling ecommerce easier than ever before. Marketing strategy is one thing, but making sure that your customer base has options is priceless.

Whether it’s SaaS (Software as a Service) company Helium 10 offering financing to Amazon sellers through its Alta financial services program, or Amazon’s partnership with Affirm, e-commerce has been quick to embrace making a user’s experience more streamlined.

Are Super Apps on the Horizon?

China’s WeChat was first released in 2011, and became the world’s largest standalone mobile app in 2018, with over 1 billion monthly active users. It has steadily evolved from a messaging app to a growing FinTech-embedded super app that offers everything from e-commerce payments to health services.

Consumers have rapidly come to expect an unbroken flow of assistance from their smartphone’s apps. To not have to close that same app when it comes time to check the inventory of their online business, then call for an Uber, or book a hotel room, is a golden ticket for those companies with the vision to imagine (and build) this new frontier.

Logiq, a global provider of award-winning ecommerce and FinTech solutions, announced plans to launch its first-ever super app in Indonesia that combines all of its mobile e-commerce and FinTech solutions into one mobile app.

Logiq said in the press release that, “the super app will provide access to PayLogiq™ e-Wallet, GoLogiq™ hyper-local food delivery and other mobile e-commerce solutions, as well as its recently announced mobile fintech platform for microlending, driver’s license testing payments and mental health consultations.”

Square and Amazon are Betting On a Different Way of Borrowing

As remarked upon earlier in this post, Buy Now Pay Later is helping many companies (and consumers) take a cautious step towards FinTech.

BNPL can easily be viewed as a “gateway” product that opens the door to more aggressive loaning (and borrowing).

Financial services company Square last year acquired the BNPL service provider AfterPay. Effectively a credit card, BNPL services allow shoppers to buy a product today and pay for it through scheduled installments.

The shares of Affirm Holdings (a point of sale financial lender of installment loans for consumers) recently skyrocketed after they disclosed a new partnership with Amazon.

That means that Amazon buyers can now split purchases for $50 or more into monthly payments. Interest rates are as low as 0% for qualified buyers and partner companies are offering special rates. This is an opportunity to use Amazon (and Affirm) money for free! The addition of Amazon now means Affirm is working with three of the most important ecommerce groups in the world, Walmart, Shopify, and Amazon.

For Ecommerce Sellers, Scaling Your Business has Never Been Easier

When it comes to efficiently managing your online selling, ready access to additional capital is crucial. Running out of inventory can kill your Amazon business. You risk losing the rankings you’ve fought so hard for.

How about being able to quickly react to the success of an Amazon product by branching out and expanding your brand offerings? Powerful Amazon brands are built that way. But, it requires a lender that understands how valuable the current online selling opportunity truly is.

For conventional banks, the whole idea of selling on Amazon is outside of their area of expertise. FBA (Fulfillment by Amazon), online arbitrage, and drop shipping are probably a mystery to them. When you add the complexities of PPC (Pay per Click) advertising costs, most conventional lending channels are simply going to say no.

Many Amazon sellers were initially attracted by the fact that they don’t need a big bank account to get started. A lot of those same sellers successfully scaled up their ecommerce businesses after beginning with a shoestring budget.

When it comes to getting a small business loan, that same exciting aspect becomes a double edged sword.

Ecommerce is Just Good Business

Increasingly, FinTech is learning that loaning to Amazon sellers is just good business. What that means is that instead of hoping that a loan officer at your conservative banking institution is going to approve the small loan you’ve asked for, you could be speaking with a specialist who recognizes the tremendous potential of today’s exploding online marketplace.

The reach of ecommerce continues to expand. Global FinTech companies can help make sure that as a seller, you can navigate the many different currencies and tax requirements you are certain to encounter.

I have a feeling that this might not be a question of Amazon sellers searching for FinTech solutions to their cash flow problems. FinTech is probably coming to you, and sooner rather than later. The key will be knowing how to take advantage of the opportunities that FinTech will certainly provide.

How Canopy Management Can Help

Canopy Management is a full-service marketing agency for Walmart and Amazon sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts.

When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy”:

Thinking About Hiring an Amazon Management Agency?

Canopy’s Partners Achieve an Average 84% Profit Increase!

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