Amazon.com (NASDAQ: AMZN) plans to introduce an in-store POS system using Kindle tablets. It's a genius move for the online retailer, but a terrible one for brick and mortar folks.
Why give your fiercest competitor a piece of your business? Worse yet, access to operations?
Amazon could launch a mobile payments system as soon as this summer, reports The Wall Street Journal. Amazon would build the program around the Kindle Fire HDX. The tablet features security software the company believes could benefit businesses.
Of course it benefits Amazon most of all.
Amazon has big plans to build its hardware business and is reportedly readying a line of smartphones for future launch. Like Apple (NASDAQ: AAPL), Amazon could use the family of mobile devices, software and stored data — it has credit-card information from more than 230 million users, according to WSJ — to build a more robust B2B business. Amazon last year bought technology and hired engineers from GoPago Inc., a San Francisco startup that offered checkout systems linked to a smartphone app, sources told WSJ.
But it's a tough sell to expect retailers to adopt a system that could benefit the very competitor eating away at profits. Or it should be.
When Walmart (NYSE: WMT) and Target (NYSE: TGT) stopped selling Kindle products in 2012, it was intended to stop showrooming. Nothing can stop showrooming, now that shoppers are armed with smartphones, but retailers can make more measured choices about the systems and companies they partner with. Letting Jeff Bezos make himself at home in your virtual back room, putting Amazon tablets into the hands of your store employees and paying hefty fees to your biggest retail competitor seems foolish at best.
At worst, it's helping to put your own stores out of business.
To attract merchants, Amazon could offer discounts or promotions via its site, people briefed on the company's plans said. Small retailers are the real target here, but with solutions such as Square, why enter into a deal with the very retailer that offers nearly everything for less.
"At the end of the day, a merchant wants to make a sale, to drive up business. And if Amazon or anyone else can help them do that, that's tough to turn away," Richard Crone, chief executive of Crone Consulting, a payments advisory firm told WSJ.
Or is it driving up someone else's business? --Laura