October 9, 2013
It Finally Happened, Amazon As A Payments Giant, Woke Up
Today Amazon announced something that may very well create great fear in the hearts and minds of any payments company that has solutions for online and ultimately retail.
Now Your Amazon Account Can Be Everyplace You Want It To Be
Amazon has over 200 million payment cards on file. They are also one of the most successful retailers on the planet and have built systems that are just about as loved as the Apple payments experience, with over 450 million payment cards on file.
[caption id='attachment_1536' align='alignright' width='300'] One button opens up your Amazon payment card credentials on any commerce website.[/caption]
Pay With Amazon Will Work With Any Site And Will Not Replace But Enhance Existing Payment Relationships And Options
This is really a zero thought, why not do this? option for any commerce website. It does not displace the existing merchant account and can coexist with just about any payment combination including PayPal. The theme is working with rather then against existing systems. It is pure brilliance that Amazon is not asking for the entire merchant relationship. It casts other services that want to own every side of the transaction into a more feeble category. I see every small and medium website choosing to do this in short order.
Amazon Offers Creditability, Protection And Trust
Amazon has offered the use of the payment platform they have perfected for quite sometime, but has not really aggressively moved to expand this service. They are the payment system that runs Kickstarter and in many ways this was a testing ground for Amazon and helped craft the Login With Amazon program. By having Amazon supply the payments aspect of Kickstarter, consumers and supporters had a layer of comfort added to the Kickstarter experience. In my view, Kickstarter would not nearly be as successful if the perception, creditability and protection Amazon brought to the experience was not present.
Almost One Click Shopping For Any Website
[caption id='attachment_1554' align='alignright' width='300'] Example of Pay With Amazon Merchant Costs[/caption]
Amazon made the system very simple to integrate into just about any commerce website. The yellow button allows for the customer to click and not need to complete any payment or address delivery details. The system will also notify that this is a returning customer and can craft offers based on prior buying history. Amazon will also perform advance fraud and payment card chargeback protection leveraging one of the best systems in the world.
Amazon will also offer advanced big data and small data that I believe may be one of the biggest reasons merchants may find this system very powerful.
Pricing is not the lowest in the world but is very competitive when one considers the value added services. There are no contracts and no other fees, it is 100% pay as you go.
It is Very Hard To Beat Amazon At Amazon’s Own Game
Recently Square introduced the Square Market. Privately I tried to impart my views on how this would cause the company to waste time, talent and resources competing with Amazon and the very well designed fulfillment services and Etsy with the very well designed user experience for consumers and merchants. In addition, Etsy and Amazon will have magnitudes more traffic for online stores owners for years to come. Traffic is really the top three reasons for any merchant to be on any platform. This new Amazon service will directly impact the Square Market in more manful ways as more commerce websites use this feature. To compete with Amazon, Etsy and eBay is futile, that war has been fought and won.
[caption id='' align='alignright' width='300'] Amazing statistic from my good friend Rakesh Agrawal.[/caption]
Almost Half Of Amazon Sales Come From Private Sellers
Amazon already has direct relationships with over 2 million merchants. They sell products that in many cases compete with Amazon and now account to over 40% of total Amazon sales. These Amazon Marketplace merchants will easily implement the Pay With Amazon feature on their standard commerce sites. This number in some cases is over 60% in some categories.
Amazon Is On The Path For Full Retail Payments
Amazon is also already mobile ready and can be coded into Android apps and indirectly into iOS apps. This will be a stepping stone for the future push for Amazon to enter retail payments. This will take place at about the same time Apple will move into full retail payments. The market already has PayPal so with the three very large companies in this market, the landscape will change dramatically. Each will have their own attributes and at some future date I will help decode what deeper meaning this will have for all of us, consumers and merchants. I saw this coming quite some time ago and back then I think my assertions seemed to be outlandish.
Hard To Sell This Idea?
I am very certain this new Amazon service will be wildly successful. I could sell it in my sleep as it just makes sense for any commerce website, my thoughts…:
Me: Would you like to have your customers make a one click impulse purchase at your website and not need their credit card number? It will cost about the same and you get access via the Amazon system…
You: Sure, how do I sign up?
It is an amazing time for payments. All of the new players and the new products they built will actually create amazing new industries with startups that will be valued in the Billions. Studying history and understanding the true needs of merchants will be the best compass to use navigating these amazing changes. And there is not a doubt that Amazon understands merchants, they are one.