Amazon Pay might go brick-and-mortar (AMZN)

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 Amazon is reportedly pursuing expanding
Amazon Pay, its buy button that allows customers to use payment
information stored in their Amazon accounts to pay on other
websites, to brick-and-mortar stores, according to The
Wall Street Journal
, citing people familiar with the

Mobile Payment

It’s not clear how Amazon would adapt the buy button to be
suitable for in-store transactions but it’s likely it will be a QR
code scan or other tap-and-pay option.

Amazon has been pushing beyond e-commerce in the payments space
to become a formidable player in the market. The firm has been
working to build out Amazon Pay — particularly in India, where it
invested $80
 to build out the platform.

And it also recently launched a
cobrand credit card for small businesses with Amex, launched a
debit card for Uber drivers, and earlier this year was reportedly
working with JPMorgan Chase and Capital One to develop a
checking-account-type product for underbanked consumers. All of
these initiatives bring Amazon further into the payments space, and
launching Amazon Pay in-store can solidify its position as a
payments player.  

Amazon’s approach could catch on with merchants and promote
adoption in the US, where mobile wallets have struggled to find
strong momentum.

  • The e-tailer could leverage its massive, loyal customer
    base to drive Amazon Pay adoption. Mobile wallets comprised less
    than 1% of
    payments in the US last year, according to the Nilson Report, with
    Apple Pay, Google Pay, and Samsung Pay adoption stagnating at
    around a quarter of eligible users. While that might suggest
    adoption barriers for Amazon Pay, it could also indicate an
    opportunity, since there isn’t a clear leader in the space in both
    adoption and engagement. And because Amazon is already associated
    with shopping, consumers might trust its mobile wallet and feel
    more comfortable using it. Further, Amazon counts more
    than 100
     Prime subscribers — not accounting for the non-Prime
    subscribing customers on top of that — according to the most
    recent estimates, highlighting a massive addressable base for
    Amazon Pay. But Amazon’s Prime Day promotion at Whole Foods came
    with friction,
    making it important for the firm to ensure it’s offering a
    streamlined product.  
  • And it can use incentives like lower processing fees to lure
    merchants to accept Amazon Pay.Amazon is reportedly looking to
    deploy Amazon Pay primarily at gas stations, restaurants, and
    retailers that it’s not in direct competition with, which can be
    an effective targeted approach since it’s seeking out merchants
    that will be more inclined to accept its payment method. And the
    firm plans to offer incentives, like lower payment processing fees
    or marketing services, to encourage merchant adoption — a
    strategy it’s been using to incentivize third-party merchants
    to accept Amazon
    Pay on their websites. If Amazon decides to broaden its reach to
    more retailers that it does compete with more directly, it could
    face obstacles — but incentives would be especially effective in
    this case. Bringing Amazon Pay in-store can allow the e-commerce
    giant to collect per-transaction fees for purchases beyond its own
    sites, which can increase volume. And if successful, Amazon could
    potentially emerge as a threat in the mobile wallet space.
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Future Of Payments 2018

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Source: FS – All – Economy – News
Amazon Pay might go brick-and-mortar (AMZN)