Here’s Why You Didn’t Know Amazon’s New Payments Product Isn’t, Well, New
The payments world — and tech press — was all abuzz yesterday when Amazon announced its new “Login and Pay with Amazon” product.
And with good reason: The product makes it dead simple to pay for products and services on non-Amazon websites by punching in your email address and Amazon password and then choosing the shipping address and payment method that’s already stored in your Amazon account.
Since Amazon has more than 200 million customer accounts, the company, in theory, has the network of credit cards in place to someday challenge PayPal for alternative checkout method supremacy on commerce sites.
Yet, amid all the hysteria over yesterday’s announcement, which was made at the Money2020 conference, some not-so-minor facts seemed to go unnoticed.
First, Amazon has been offering sites and apps the option to let their visitors log in to their properties with the visitor’s Amazon account info since early this year — in much the same way that sites offer visitors the option to sign in to the site using social network logins like Facebook.
The goal with this type of login is that it allows sites to be able to keep a digital record of who is visiting their page and personalize the content for each visitor without making them go through an annoying sign-up process.
Secondly, Amazon has offered sites the chance to let their shoppers check out and pay using preloaded payment and billing info from their Amazon accounts since at least 2011.
What’s the catch?
In an interview on Monday, Amazon Payments VP Tom Taylor explained that with this release, Amazon is essentially combining the two into one slick package.
“I think we all saw that these things work well together, but wanted to go to market individually first,” he said. “But sellers’ reaction back to us was, ‘These are great. Can they work together?’”
That still doesn’t explain why many people — even those in the payments industry — didn’t seem to know this.
Taylor admits that the products have had an “awareness problem” — something that conference appearances such as yesterday’s hope to help solve.
But the real reason many people weren’t aware that you could already pay using your Amazon login on other sites is that there just aren’t that many giant shopping sites that have integrated this payment option.
Yes, there are some sites — thousands, even, according to Taylor. Jockey.com, for example, is one name-brand example.
But not the type of commerce sites that large masses of people visit on a regular basis. No Walmart.com. No Target.com. No Staples.com. No BestBuy.com.
That makes a ton of sense when you think about it. Amazon is each of these retailers’ single biggest, and most feared, competitor.
Would they be willing to give Amazon a glimpse into their sales flow in order to take some friction out of the site login and payment process for their shoppers? Highly unlikely. (This is one thing that Facebook’s new mobile checkout product has working in its favor: It doesn’t compete with the commerce giants.)
Of course, Amazon doesn’t need to integrate with those sites to succeed. It can still gain solid adoption for its payment product without buy-in from the very biggest online retailers. There are plenty of mid- and long-tail commerce sites willing to make the tradeoff that the biggest commerce guys won’t.
And, beyond that, there are actually still companies selling services and goods online that don’t yet have to call Amazon a competitor.
In our interview, Taylor pointed to Gogo — the in-flight Internet service — as an example of a popular, noncompetitive service that has integrated the Pay with Amazon option.
You could also imagine some so-called sharing-economy startups — the Lyfts and Airbnbs of the world — integrating such a payment option, too (though Login and Pay with Amazon is currently only available on mobile websites, not mobile apps, Taylor said).
In the end, though, Amazon seemingly enters a new business category on a monthly basis. And when it does, new groups of companies may find themselves looking at Amazon as a competitor and erect new barriers to broad adoption of Pay with Amazon.