Payment: Shopify with Payment Company's Platform Cooperation - Key Points of Expert Dialogue

Payments: Shopify’s platform partnerships with payment We recently hosted an expert call with the Former Head of Payments Platform Partnershipsat Shopify. We discussed Shopify’s evolving payment platform partnerships, including withplayers such as Adyen and PayPal. The note provides key takeaways from the call. Please Harshita Rawat, CFA+1 917 344 8485harshita.rawat@bernsteinsg.com Simran Ratani+1 917 344 8329simran.ratani@bernsteinsg.com Shopify’s payments strategy is naturally maturing from a single-partnerinfrastructure model into a deliberately multi-provider orchestration layer, with first-party payments as the profit engine. Not surprisingly, third-party integrations yields aresignificantly lower vs. that of first-party’s. This is driving Shopify’s insistence on convertingas much GMV as possible from third-party to first-party, when possible. From a payments Viola Chen+1 917 344 8614viola.chen@bernsteinsg.com The evolution of the relationship with Adyen reflects Shopify’s enterprise inflectionpoint, especially in Europe. As Shopify moved upstream, payments became the primaryfriction point in large-merchant replatforming, not core commerce software. Enterprisesalready embedded with Adyen were unwilling to sacrifice existing payment data, localpayment methods, omnichannel integrations, and fraud models simply to adopt Shopify. Shopify has accommodated this demand through a third-party Adyen integration, but the Shopify-PayPal Unbranded relationship is an example of the limits of competingon price alone. Despite PayPal’s historical dominance on branded checkout (especiallyimportant in Europe) and its ability to win Shopify’s RFP through attractive commercialterms, operational fragility (e.g., outages, conversion) outweighed pricing (e.g., in Francewhere PayPal had won unbranded processing for Shopify).This reinforces our view thatlarge merchant acquiring relationships are often more about ‘value’ vs. simply a Shop Pay’s evolution is an example of Shopify’s intent to own the consumer interfacewhile abstracting the payment rail. While transaction execution still flows through ShopifyPayments partners, the authentication, data, and consumer relationship sit firmly withShopify. This positioning (of Shop Pay) weakens external branded wallets overtimeand explains Shopify’s sensitivity to allowing third-party players to build consumerecosystems atop its merchant base. Shop Pay is less about near-term take-rate expansion BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS We rate Adyen OP. We rate PayPal MP. Please also reach out to us for a replay of our recent fireside chat with Adyen’s Co-CEO. PLEASE SEE LINKS TO OUR RECENT RESEARCH •Adyen, Braintree, Stripe, Checkout: Part 1 — A look at key metrics(April 2026)•PayPal: Under siege; a look at checkout wars - has the ship sailed?(February 2026)•Adyen: An open letter to management (February 2026) DETAILS EDITED TRANSCRIPT Brief expert bio:Former Head of Payments Platform Partnerships at Shopify. From 2022 to 2025, the Expert led globalpayments strategy for Shopify, overseeing a platform processing hundreds of billions in annual volume and managing critical Harshita Rawat Good morning. Thanks for joining us today. Why don't you give us a little bit of an intro to kick off our conversation? Expert Yes, absolutely. Thanks for that. I've been in the financial services/financial technology space for about two decades now. I workedat large corporate banks, moved over to payment organizations, so have worked at organizations like PayU, Paytm, across theglobe. But relevant to today's conversation, I've been at a few platforms now over the last almost ten years or so, includingLightspeed Commerce, initially, where I was leading payment partnerships, again, very similar to Shopify. I did that for about twoyears. And then over the last four years or so, I was at Shopify, as you mentioned, leading the Payments Platform Partnerships, Harshita Rawat Great. And I guess just to level set,can you maybe talk about the platforms you looked at while at Shopify? We know thebig names, but I think it will be good for everyone to be at that same starting point. Expert Yes, absolutely. I think, broadly, and I think it's important to clarify just the different payments pillars at Shopify and how they wereoperating, because I think that will address your question more directly, but for payments at Shopify, we had two or three broad The first bucket is called Shopify Payments, which is the first-party white label solution, where Shopify owns the merchantexperience. We initially owned the relationship, the pricing, as well as the go-to-market aspect. Any merchant that signs on toShopify’s software, in markets where it's available, Shopify Payments would be shown up as default. So that's one bucket, which On Shopify Payments, historically we only had Stripe, and Shopify Payments as a product has existed since 2014. So it's been about12 years that Shopify has worked wit