Amazon’s New Payment System Is A Threat, But it Isn’t Revolutionary
While Amazon (Nasdaq: AMZN) launched its new merchant payment system this week with much fanfare, the ability to streamline shopper payments is not exactly new for the giant online retailer. It seems that most retail and financial executives were simply unaware of the platform until now.
"Login and Pay with Amazon" is designed to let merchants accept payments from online shoppers without requiring them to create a dedicated account. The goal of the service is to replace "guest checkouts" with the ability for merchants to recognize repeat customers.
"Hundreds of millions of Amazon buyers can login and pay on your website or mobile site with the information already stored in their Amazon account. It's fast, easy and secure and helps you add new customers, increase sales, and reduce fraud costs,” Amazon said on its Amazon Payments web site.
However, the Login and Pay service is not exactly new. It was just not well-publicized to merchants, shoppers, and, well, really anyone. Since at least 2011, Amazon has allowed shoppers to check out and pay using preloaded payment and billing information from their Amazon accounts. Plus, earlier this year, Amazon began allowing sites and apps the option to let their visitors log in to their properties with their Amazon account information.
“I think we all saw that these things work well together, but wanted to go to market individually first. But sellers’ reaction back to us was, ‘These are great. Can they work together?’ ” Amazon Payments Vice President Tom Taylor told All Things D.
Don’t get me wrong. This move IS a big deal for Amazon, and its competitors should take note. Amazon’s streamlining of payments from other sites could eventually allow it to compete with PayPal (Nasdaq: EBAY), since Amazon boasts more than 215 million customer accounts. Plus, we are not aware of other major e-commerce sites that have integrated payments in this way.