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Shopify to launch its own take on the business bank account – Financial Post



Shopify Inc. says it plans on allowing merchants to start opening their own very bank-like accounts with it in the United States later this year, and then in Canada at some point after that, as the e-commerce company expands further into financial services.

Among the offerings the Ottawa-based firm announced Wednesday was Shopify Balance, a planned business account, payment card and rewards program that are being designed with start-ups and entrepreneurs in mind.

The no-monthly-fee, no-minimum-balance account will function similarly to a typical bank account, except it will run through Shopify instead of a traditional bank. Merchants will be able to make deposits, withdraw funds, pay bills and track transactions through the account and with physical and virtual cards, the company says.

There are hundreds of thousands of merchants on Shopify using their personal bank account, credit card “and a box full of receipts” to run their businesses, said Kaz Nejatian, vice president and general manager of Shopify’s financial-solutions team.

Those same entrepreneurs and businesses could be dealing with traditional banking systems that may misunderstand them or are designed to serve bigger companies, which is an issue Shopify is aiming to solve.

“If you’re an independent business, the legacy banking system just sucks for you,” Nejatian said. “It is not designed to do the things you need to do. It is not designed to move at the speed you need to move at. And it’s not designed around your business.”

While Shopify is trying to improve on what banks are doing, it will have to rely on regulated financial firms in some ways, according to Nejatian. Shopify, for example, will build the software and the user experience, but the company will partner with a financial institution so that funds are held in federally insured accounts.

The cards will offer merchants access to their funds, including money Shopify is loaning them via its Shopify Capital program. There are also plans to offer merchants cash back and discounts for their business spending with Shopify Balance, which will launch later this year in the U.S., and then at some point later in Canada. Further details are still to come.

“It will do everything that a legacy bank account does, but it’ll do all of it better,” Nejatian said.

Shopify has a pattern of launching new products first in the U.S., its biggest market. But the business account and card also mark another step by Shopify into financial services. The company already provides payment processing and cash advances and loans to entrepreneurs, with approximately US$192 million in Shopify Capital funding outstanding as of the end of March. Shopify Capital launched in Canada in April.

The business account wasn’t the only financial service Shopify announced Wednesday, as the company unveiled a new “buy now, pay later” option that will launch in the U.S. later this year and let consumers pay in four interest-free instalments.

These products were among several new and updated ones that were announced in sync with Shopify’s Reunite event, a virtual reboot of the company’s annual Unite conference, which was cancelled in late February because of COVID-19.

“We’re going to give all eligible merchants on all of our plans the financial products they need to start, run and grow their business,” Shopify chief operating officer Harley Finkelstein said during the webcast.

The new products come as the coronavirus pandemic has nudged consumers towards more online shopping, with Shopify saying earlier this month that COVID-19 has “accelerated the shift of purchase habits” toward e-commerce.

While the pandemic may be increasing online shopping, it remains to be seen if it will translate into consistent profits for Shopify, which reported a net loss of US$31.4-million for the three months ended March 31. Revenues, however, grew 47 per cent year-over-year for the first quarter, to US$470-million.

The new products could help Shopify’s expansion efforts, with National Bank Financial analyst Richard Tse writing in a report earlier this month that they continue to believe Shopify “is in the early stages of a rapidly growing” market for e-commerce.

“With recent announcements of new services … we expect the pace of new product development to continue, as will adoption, which should drive up take-rates and merchant stickiness to the platform,” Tse said.

• Email: | Twitter: GeoffZochodne

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HSBC warns it could face reprisals in China if UK bans Huawei equipment: Telegraph – Reuters



FILE PHOTO: HSBC’s building in Canary Wharf is seen behind a City of London sign outside Billingsgate Market in London, Britain, August 8, 2018. REUTERS/Hannah McKay

(Reuters) – HSBC Holdings Plc (HSBA.L) Chairman Mark Tucker has warned Britain against a ban on networking equipment made by Huawei Technologies Co Ltd, claiming the bank could face reprisals in China, the Telegraph reported on Saturday.

Tucker made the claim in private representations to British Prime Minster Boris Johnson’s advisers, the newspaper reported here citing industry and political sources.

Britain designated Huawei a “high-risk vendor” in January, capping its 5G involvement at 35% and excluding it from the data-heavy core of the network. It is looking at the possibility of phasing Huawei out of its 5G network completely by 2023, according to officials.

Reporting by Ismail Shakil in Bengaluru; Editing by Dan Grebler

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OPEC+ Agrees On Extending Record Output Cuts –



OPEC+ Agrees On Extending Record Output Cuts |

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is’s Head of Operations

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    OPEC and its partners concluded their meeting on Saturday afternoon, announcing that it would extend its current production cut deal.

    Algeria’s Energy Minister Mohamed Arkab, OPEC’s current President summed up the group’s sentiment by saying that “Despite the progress achieved to date, we cannot afford to rest on our laurels,”.

    The last couple of days, the cartel’s de-facto leader Saudi Arabia negotiated with other OPEC members and some non-OPEC countries including Russia, Kazakhstan and Azerbaijan to extend the current 9.7 million bpd output cuts for at least another month.

    Most countries partaking in the record production cuts were willing to continue the current deal, but poor compliance from countries like Iraq, Nigeria and Kazakhstan has caused discontent among other OPEC members, some of which have even made deeper cuts than agreed on in April.

    During the virtual meeting on Saturday, the cartel agreed that the countries that were unable to reach full conformity in May and June will have to compensate for this in July, August and September.

    Oil prices effectively doubled during the month of May as global demand started to recover and record output cuts and worldwide well shut-ins decreased the monster glut.

    While the OPEC+ deal extension undoubtedly will have a bullish effect on markets, prices aren’t likely to rip much higher on Monday as the OPEC+ news has largely been priced in already.

    For oil prices to make a full recovery, global demand will have to recover and crude inventories have to be drawn down, both of which will likely take up to two years. Pioneer’s Scott Sheffield said that the quick rebound of demand to around 94-95 mb/d following the “reopening” of so many economies will give way to stagnation, saying that demand won’t reach pre-pandemic levels until 2022 or even 2023.

    For now, the next bullish catalyst for oil could come from Saudi Aramco, which could set the trend for higher oil prices in June as it is expected to release its OSPs (official selling prices) on Monday. Aramco’s OSPs are often a leading indicator for Iraqi, Iranian and Kuwaiti crude prices, and last month, Brent futures rallied after Riyadh hiked its prices for crude to Asia.

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      OPEC, Russia to extend record oil cuts to end of July amid pandemic –



      OPEC, Russia and allies agreed on Saturday to extend record oil production cuts until the end of July, prolonging a deal that has helped crude prices double in the past two months by withdrawing almost 10 per cent of global supplies from the market.

      The group, known as OPEC+, also demanded countries such as Nigeria and Iraq, which exceeded production quotas in May and June, compensate with extra cuts in July to September.

      OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7 million bpd from July to December.

      “Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain,” Saudi Energy Minister Prince Abdulaziz bin Salman told the video conference of OPEC+ ministers.

      Benchmark Brent crude climbed to a three-month high on Friday above $42 a barrel, after diving below $20 in April. Prices still remain a third lower than at the end of 2019.

      WATCH | Canadian oil producers don’t see relief after OPEC deal to cut output:

      Richard Masson, chair of World Petroleum Council-Canada, says Ottawa needs to move soon if it plans to help producers, as companies face ‘really tough decisions.’ 0:55

      “Prices can be expected to be strong from Monday, keeping their $40 US plus levels,” said Bjornar Tonhaugen from Rystad Energy.

      Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act of pushing up oil prices to meet their budget needs while not driving them much above $50 US a barrel to avoid encouraging a resurgence of rival U.S. shale production.

      1 billion barrels of excess oil inventories

      The April deal was agreed under pressure from U.S. President Donald Trump, who wants to avoid U.S. oil industry bankruptcies.

      Trump, who previously threatened to pull U.S. troops out of Saudi Arabia if Riyadh did not act, spoke to the Russian and Saudi leaders before Saturday’s talks, saying he was happy with the price recovery.

      While oil prices have partially recovered, they are still well below the costs of most U.S. shale producers. Shutdowns, layoffs and cost cutting continue across the United States.

      As global lockdown restrictions to halt the spread of the coronavirus are being eased, oil demand is expected to exceed supply sometime in July but OPEC has yet to clear 1 billion barrels of excess oil inventories accumulated since March.

      Tonhaugen said Saturday’s decisions would help OPEC reduce inventories at a rate of 3 million to 4 million bpd over July-August.

      Workers are seen in Aramco’s oil separator at processing facility in Abqaiq, Saudi Arabia, in September 2019. (Amr Nabil/The Associated Press)

      “The quicker stocks fall, the higher prices will get. And that is crucial for many OPEC+ economies, whose fiscal budgets count on oil sales,” he said.

      Nigeria’s petroleum ministry said Abuja backed the idea of compensating for its excessive output in May and June.

      Iraq, with one of the worst compliance rates in May, agreed to extra cuts although it was not clear how Baghdad would reach agreement with oil majors on curbing Iraqi output.

      Workers are seen in the Nihran Bin Omar field north of Basra, Iraq, in January 2017. (Nabil al-Jurani/The Associated Press)

      Iraq produced 520,000 bpd above its quota in May, while overproduction by Nigeria was 120,000 bpd, Angola’s was 130,000 bpd, Kazakhstan’s was 180,000 bpd and Russia’s was 100,000 bpd, according to OPEC+ data.

      OPEC+’s joint ministerial monitoring committee, known as the JMMC, would now meet every month until December to review the market, compliance and recommend levels of cuts.

      The next JMMC meeting is scheduled for June 18, while the next full OPEC and OPEC+ meeting will take place on Nov. 30-Dec. 1.

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