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Share Facebook Twitter LinkedIn Pinterest Email Google News' now to get latest article notification text size Shopify’s stock is up nearly 90% this year. Andrew Harrer/Bloomberg Shopify It announced an agreement that allows merchants on the platform to offer consumers a choice to purchase goods Amazon Main advantages. Analysts speculate that one of the benefits for technology companies will be increased merchant usage. Shopify and Amazon.com both offer services and tools for online sales, and in turn compete for market share. According to the new agreement announced on Wednesday, Amazon (Symbol: AMZN) will release an application in Shopify S (SHOP) ecosystem allows merchants to integrate ‘Shop with Prime’ option into product page. That allows customers to use their Amazon wallets—as well as the ability to take advantage of benefits like fast delivery and returns through Amazon’s fulfillment network. Shopify’s payment system ultimately processes the transaction at checkout. Previously, merchants could only add Shopify to their own site, but that partially violated Shopify’s terms of service, as the platform prevented them from collecting payments or viewing transaction data. The new deal gives Amazon an easier way to capture Shopify’s gross merchandise volume, or GMV, which is expected to reach $230 billion by 2023, Wedbush analyst Scott Devitt wrote in a note Thursday. He also wrote that the value of an Amazon Prime membership would increase by expanding the benefits to more sites. The analyst has price targets of $180 and $62 above on both Amazon and Shopify stock. Shares of Shopify rose 6 percent to 63.60 in premarket trading Thursday. Amazon stock was trading at $135.17. Oppenheimer’s Ken Wong sees more merchants using the option now that it’s officially supported, and that could convert more customers from browsing to actual product purchases. Wong has an outperform rating on Shopify with an $80 price target. Shopify investors also don’t have to worry about Buy Amazon as it takes a big chunk of Shopify’s payment revenue. For transactions through Amazon Wallet through Shopify Payments, “we expect full access to data and at least some take value.” [commission] engagement,” Wong said. To be sure, merchants may still have to deal with potentially higher fees and keep Amazon informed of their inventory trends. Write to Karishma Vanjani at [email protected]
