6 Things Amazon Got All Wrong in Payments

  1. On August 2014, eCommerce giant Amazon announced the launch of a secure card reader and mobile app called Amazon Local Register. This register, similar to Square and PayPal Here, providing local businesses with the tools required to seamlessly accept debit as well as credit card payments via tablet or smartphone, is shutting down on February 1, 2016. It has stopped accepting new customers since October 30, 2015. Existing merchants will have access to their transaction history until February 28, 2016. Basically an mPOS, Amazon Local Register enabled users to keep track of their businesses as they grew. What made Amazon Local Register different than its competitors was its price. Users had to pay a $10 fee for the card reader and then they had to download the free mobile app from Amazon Appstore, Apple App Store or Google Play.
  2. On the same day, Amazon also announced the shutting down of its local daily deals site, Amazon Local on December 18, 2015. However, Amazon is going to stop selling daily deals for local merchants only on Amazon Local and the Amazon Local app. Amazon’s Deal of the Day, Gold Box Deals, and Kindle Daily Deals will not be affected by this announcement.
  3. In June 2015, it discontinued its platform, Flexible Payments Service, a customizable API that allowed merchants to tailor the checkout experience to their needs and replaced it with Amazon’s new one one-size-fits-all Login and Pay with Amazon method. Amazon also recently announced Login and Pay with Amazon for mobile apps.
  4. In January 2015, Amazon also pulled back its beta mobile wallet from the Google Play Store and Amazon App Store. The Android app was developed by the e-commerce giant to store loyalty and gift cards. The move came at a time when Amazon had been struggling on the mobile front. The company’s Fire Phone had also seen disappointing sales. Being in beta phase, the Amazon Wallet app had limited functionality and didn’t even have the necessary feature of storing payment cards.
  5. During the same time, the Crowdfunding powerhouse Kickstarter moved away from using Amazon Payments as its payment processor since Amazon was going to discontinue its customizable API platform, Flexible Payments Service and it didn’t support international payments at that time. Raking in over $529 Mn in annual pledges, the company opted for online and mobile specialist Stripe to handle its credit card payments, both nationally and internationally.
  6. In September 2014, Amazon also shut down WebPay, a P2P payments service offered by Amazon. Via WebPay, users were able to transfer money using an email address. However Amazon’s attempt to challenge competitor eBay’s PayPal unit failed.

What’s going wrong with Amazon in the payments industry? Amazon has been trying really hard to compete with eBay and now also with the new PayPal. There has also been some recent success for the company in this space: the Login and Pay with Amazon feature seems to be gaining traction. Recently, Amazon announced the launch of The Login and Pay with Amazon feature in mobile apps as well.

Clearly, Amazon is not giving up on its Payments plans. It was recently reported that more than 60 employees from Amazon were present at Money20/20 this year in Las Vegas. Earlier this year, Amazon also hired ex-PayPal executive Patrick Gauthier to become the VP of External Payments at Amazon. Jaymee Johnson, who was working for Softcard, a mobile payments system (now acquired by Google to incorporate with Google Wallet) for more than 4 years also joined Amazon Payments this year as Head of Global Marketing.

Let’s see how one ray of light and some great farmers help the seed of Amazon Payments to grow again.