Amazon Takes On Online Payment Processing
By Hannah Ash, contributing writer
Is there anything the retail giant won’t take on? In the push to win the retail wars, the path of Amazon can be compared to Alexander the Great, the prolific emperor who by the age of 30 created one of the world’s largest empires. Amazon’s current trajectory, especially with the news that it is adding payment systems and processing into its wide fold, mirrors that of Alexander the Great. What, exactly, is the Internet emperor up to now? It’s worth a close look.
Apparently, a whole lot. The giant plans to start managing payment systems for other companies such as startups and subscription services. It’s an easy, and logical, way for Amazon to leverage its mass amounts of customer payment data into a digestible from which both retailers and consumers can benefit. Amazon, apparently, plans to allow users to pay for everything from utility bills to plane tickets using previously stored payment info. Though PayPal has long enjoyed its position as king of the e-commerce payment, other startups and companies have long been muscling their way in. Just last week Groupon launched Gnome, an all-inclusive company focused on providing retailers with complete POS, iPad based solutions for brick, or click, success.
Amazon’s sales as a middleman, instead of as direct good to consumer producer, already account for 40 percent of its current sales; it seems the retailer has found a secret for success that it’s not willing to give up (as this new direction indicates so clearly). One June 18th of this year, it is anticipated that Amazon will roll out a new payment key for smartphones that will better enable mobile and e-commerce. Though this payment system, that makes it so easy for retailers and shoppers alike to make the sale, seems easy at first glance, it’s not without some widely speculated issues. One obstacle the retailer must hurdle: getting smaller retailer to trust handing over payment systems and processing to such an Internet giant. The ease of use, however, that this system provides may just prove the push retailers and customers need to make the jump and add Amazon into their regular catalog of making payments.
Despite potential drawbacks, Amazon carries on. A benefit to its plan is the trust the retailer has carefully cultivated. As Amazon’s vice president of seller services, Tom Taylor, said in an interview, "if you think about giving a merchant that you may not know very well the right to continue to charge your credit card in the future, you really want to know that a good relationship with Amazon stands behind that," Taylor said. Taylor really played up Amazon’s reputation as a reason why it stands out as the payment processing wars rage on, stating, “"If you think about giving a merchant that you may not know very well the right to continue to charge your credit card in the future, you really want to know that a good relationship with Amazon stands behind that.” He said he hopes that whoever ends up being the next Spotify considers working with Amazon to really nail down payment processing results for its customers.