Amazon’s new payment system shows that when the *80,000-pound gorilla moves, the business and technology press jump up, notepad at the ready.
The latest news was the announcement this week (broadcast by a huge PR effort) that the retailing/cloud services hosting giant has ramped up its payment offering.
Branded as “Login and Pay with Amazon,” Amazon Payments is an alternative payment option that online retailers like you can provide to your customers. With more than 215 million active Amazon customer accounts, Amazon’s marketing messaging is that you can make it easier for your browsers to become buyers. It allows shoppers the option of logging into their Amazon account to pay for their transaction with you. Customers won’t have to enter address of card information on your site. Ease of use, familiarity, and security are the buzzwords.
The default integration option adds a “Pay with Amazon” button on your shopping cart. You can also hack the installation and customize it to provide payment access right on your product pages. Amazon widgets and APIs (application programming interfaces) enable it to work on personal computers, laptops, smartphones and tablets.
A Replacement for Guest Checkout?
Amazon is positioning Amazon Payments as a one-stop-shop integration for web payments. One of the justifications is to replace guest checkout. But why does the world need another payment option? Well, payment trust remains an important stumbling block for conversion. Ease of payment is another big issue, and an even bigger issue for mobile commerce. Amazon’s offer is that they can do it better for you than your current payment options.
Amazon’s New Payment System is Not PayPal
It’s that simple. Judging from the commentators on a half-dozen articles I read on the announcement, PayPal must be the most loathed vendor associated with the ecommerce industry. A lot of people absolutely despise PayPal. (In many cases, you can characterize the dislike well beyond despise). The fact that the vendor is Amazon and not PayPal will generate usage.
Another marketing pitch is that Amazon’s new payment system is a way to deliver improved services that “could include managing and tracking orders, purchase history detail, special discounts, instant access to shipping addresses and payment methods.”
Amazon Payments Guarantees Payment
This is a big deal. As long as a you ship the item, provide a tracking number, and receive a payment authorization from Amazon, your payment is guaranteed. For retailers that do a lot of international business, shipments to customers in over 30 countries (neither China nor Japan are on this list) are covered. That’s a lot of fraud heartache gone.
It is Going to Be Easy to Install
You know that Amazon’s new payment system will be easy to implement. That’s a given. Plug-ins for a number of ecommerce platforms, including Magento, 3dcart, and Miva already exist. If Amazon doesn’t provide them, some industrious software developers will be hacking plug-ins and selling them as quickly as they can.
The Cost
The transaction fees are simple. They are 2.9 percent + $0.30 per transaction, with lower rates based on volume.
It Works with Mobile
If you’re into mobile commerce (and you should be), you can receive mobile payments across the web, Kindle, iOS and Android.
Amazon’s new payment system will probably be successful (at least in the context of public perception) simply because the company is so large and the Amazon brand so trusted. While the ultimate success may not be what the strategic planners in the head office have estimated, I can’t see this service being an abject failure. Like Google Checkout before, adoption will come simply from the power of the marketing machine behind it.
Does Adopting Amazon Payments Make Sense for Your Site?
Amazon is the largest online retailer by many a mile. If Amazon were a person, it wouldn’t be in the 1%, it would be in the 0.001%. It is unlikely that you are not competing against it. The chief question therefore, is do you want to enrich a competitor when there are already plenty of existing options for processing customers’ transactions? You have obviously survived so far without Amazon’s new payment system, haven’t you?
* In case you’re still scratching your head at the 80,000-pound gorilla reference, Amazon is no ordinary 800-pound gorilla. It is to online retailing what the United States defense budget is to military expenditures. Meaning that both dwarf the competitors and countries who are a long way behind in the distance. In the case of Amazon, its online sales are greater than the aggregate of its 12 biggest competitors, according to SEC filings.
