Amazon Charts Course into Online Payments (Oct. 10, 2013)
Online retail titan Amazon is making a major foray into electronic payments, unveiling a new service that enables e-commerce merchants to let customers pay with the cards saved in their Amazon accounts. Dubbed Login and Pay with Amazon, the feature gives participating retailers access to Amazon’s 215 million active account holders, who can make purchases on those merchants’ Websites by clicking a Pay with Amazon button at checkout, then entering their Amazon user name and password. Amazon does not share customers’ credit card information, and all purchases are covered by the same transaction protection as purchases made on Amazon.com, the company said. Amazon charges merchants a 2.9 percent fee, plus 30 cents, for each sale made via Pay with Amazon. Among the electronic retailers who already have signed up are in-flight Internet service Gogo, auto parts retailer Autoplicity.com and home goods purveyor Build.com.
Amazon’s movement into payments could be seen as a shot across the bow of PayPal Inc., which has long held a dominant position in online merchant payments, according to industry observers. But in promoting the service, Amazon could have trouble overcoming the view held by many merchants—especially large retailers—who consider the company a major competitor due to Amazon’s steady march into nearly all areas of online retailing. “Amazon is a serious player [in e-commerce]. They’ve exemplified many of the best practices . . . the obvious issue is one of trust with merchants that are Amazon competitors, and whether they can solve for that or not,” noted Bill Ready, CEO of e-commerce processor Braintree, during a panel at the Money 2020 conference in Las Vegas yesterday. Braintree was acquired by PayPal last month.