Is Shopify Stock Halal?

Is Shopify Stock Halal?

How much of Shopify’s revenue comes from haram?

Shopify earns its revenue from the following revenue sources:

  • Subscription Solutions:

Shopify provides a cloud-based ecommerce platform for small and midsize businesses to start and run their operations.

In exchange, Businesses pay Shopify a recurring subscription fee to use its service. 

Shopify also sells custom website themes, apps, and domain name registrations for online businesses.

  • Merchant Solutions:

Includes revenues from payment processing, transaction, and referral fees from partners, advertising revenue on the Shopify App Store, Shopify Capital, Shopify Shipping, the sale of POS hardware, and collaborative warehouse fulfillment solutions.

The contributions from each of Shopify’s revenue segments in their Q1 2021 report were as follows:

An area of concern for Practical Islamic Finance is revenue generated from Shopify Capital.

Shopify Capital is a lending service Shopify provides its merchants.

In exchange, Shopify takes a “repayment rate” determined on an individual basis,  which will be either 1.1 or 1.13.

So in the case of lending $10,000, Shopify would collect either $11,000 ($10,000 x 1.1) or $11,300 ($10,000 x 1.13).

The loan is divided into six 60-day repayments for a 12-month term. 

Shopify Capital has grown to approximately $2.0 billion in cumulative capital advanced since its launch in April 2016, $312.8 million of which was outstanding on March 31, 2021.

Given $312.8 million is outstanding and Shopify’s published factor rate of around 13% (0.13), Shopify’s estimated revenue generated from this segment is ~$40.6 million. 

Compared to Shopify’s revenue for its Trailing Twelve Months as of April 28, 2021, of $3.4 billion, borrowing fees of $40.6 million would account for ~1.19% of total revenue.

Practical Islamic Finance concludes:

Given the Shopify Capital segment is shrinking compared to Shopify’s total revenue and only contributing to ~1.19%, Practical Islamic Finance finds only a non-material part of Shopify’s revenue comes from haram. We recognize that active monitoring is necessary for the Shopify Capital segment. If it becomes a material part of Shopify’s business, we will change our rating accordingly. 

Does Shopify rely on interest to operate?

For the Trailing Twelve Months as of April 28, 2021 (Numbers in thousands, U.S. Dollars):

Interest Income: $15,797

Total Revenue: $3,448,137

Interest Expense: $9,958

Total Expenses: $3,165,852

Interest Income / Revenue: 0.46%

Interest Expense / Total Expense: 0.31%

Practical Islamic Finance concludes:

Riba is used but not relied upon in Shopify’s operations.

What is Shopify’s Environmental, Social, and Governance (ESG) impact?


According to Shopify, the company invests $5M annually towards fighting climate change.


Shopify has a high Glassdoor rating of 4.2 out of 5.0 from over 1,100 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.


In September 2020, Shopify confirmed a data breach caused by two “rogue members” of its support team.

The breach led to customer data from fewer than 200 of its merchants being stolen.

Shopify fired the employees in question, and the matter was forwarded to the FBI.

Practical Islamic Finance concludes:

Shopify has a net positive ESG impact.

Comfort Rating

From Shopify’s business, financial, and ESG reviews, Practical Islamic Finance rates Shopify stock as:

Comfortable to invest in from a Halal perspective.



Exhibit 99.1 Press Release Q1 2021 

Shopify Capital loan · Shopify Help Center

Overview of Shopify Capital · Shopify Help Center

Shopify’s Sustainability Fund 

Wikipedia: Shopify

Shopify Reviews  

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