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Amazon forays into in-app payments, competing with Apple Pay

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November 2, 2015

amazon_payments_blogAmazon is eyeing a bigger role in payments with its Pay With Amazon, a mobile payment platform that integrates natively with third-party applications and is a direct attack on Apple Pay.

The digital retailer is rolling out its mobile payments service, in which users can pay on mobile retail apps through a button labeled Pay with Amazon, which consumers will use a login from their existing Amazon accounts with a one step checkout to pay. Amazon saw an opportunity within the growing mobile payments sector to take advantage of its large customer information database.

“Pay with Amazon extends Amazon’s reach beyond the virtual four walls of the Amazon web site, potentially with larger organization as well as within the long-tail of the market, especially in the mobile arena given that Pay with Amazon supports a range of integration protocols,” said Michael Becker, co-founder and managing partner of mCordis. “The service will extend Amazon’s branding, reinforce its relationship with existing Amazon customers since they can now leverage the trust they have with Amazon in other parts of the web, and could attract new customers to Amazon given that they too may want to take advantage of the seamless and frictionless payment capabilities this service provides.

“Finally, once Amazon reaches a critical mass it may begin to expand the service beyond digital payments and begin supporting physical terminals, pico-payments for future subscription models, or they may provide shopper insight and offers services, shipping and same day delivery services and any number of additional capabilities to help streamline commercial engagements across the web and in our every day lives.”

Retailers in payments
As developers, banks and retailers alike introduce their own interpretation of mobile payments, Amazon did not pass up the opportunity to get in the game as well perhaps following in the footsteps of its predecessor eBay with its PayPal.

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It is no secret that Jeff Besos, Amazon’s founder and CEO, planned from first invention of the company to be ruthless in his business plans. As Amazon continues to corner a variety of markets, it is obvious he is continuing this strategy.

The retailer is brushing aside criticisms, which question how many other retailers will want to partner with a competing company. According to Re/code Amazon claims its payments sector of the business is a separate entity from its retail silo, hoping that retailers will see the benefits of a possible partnership rather than its drawbacks.

The retailer is hoping to enter the payments game through an option that appeals to consumers through convenience and security. Integrating with existing accounts on Amazon, eliminating the need to reenter payment information, which can be cumbersome.

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The process will have to be extremely streamlined to compete with the frontrunner in mobile payments, Apple.

Mobile Payments
Recently, American Express announced its foray into Canada and Australia with Apple Pay this year, and bringing the solution to more large markets in 2016, a reflection of the mobile payments boom with developers and financial services (see more).

Also, Chase’s dedication to competing with current mobile payments developers, such as Apple and Samsung, could potentially offer it front-runner status as its substantial customer base strays away from the pigeonhole caused by software developers (see more).

“Amazon is the most popular retail web site in the United States, with over 175 million monthly visitors in the United States in March 2015; eBay, Walmart and even Apple are relatively far behind,” Mr. Becker said. “Amazon is experienced, understands, probably better than most, how to merchandise and process transactions on the web and in mobile, and it is trusted.

“Assuming the Pay with Amazon integration and support services are as robust as they portray them to be, and their commercial terms are on par or better than the competition, this service should compete extremely well with other mobile payment players,” he said.

Final take
Brielle Jaekel is editorial assistant at Mobile Marketer

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Brielle Jaekel is staff writer on Mobile Commerce Daily and Mobile Marketer, New York. Reach her at brielle@mobilemarketer.com.

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