Amazon is doubling down on its payment business. Started in 2013 it has reached about 23 million users outside its own web properties which is only a fraction of the 170 million active PayPal accounts. With the recent launch of the Global Partner Program, the idea is that other retailers can set up an e-commerce site using the Amazon log-in to process the transaction. The participating companies are able to offer a convenient shopping experience that doesn’t require their clients to reenter payment information. Obviously, Amazon is charging for this service. By ramping up this business, it will be able to benefit from sales transaction outside its core retail business.
Obviously, Amazon is going after PayPal. By providing convenience and perhaps aggressive terms on its payment service, the company would be well positioned to grow, but there is a catch. Retailers have to think long and hard before they reveal their client data to another retailer let alone the world largest retail e-commerce site. Via this service, Amazon learns what people buy, who they are and what they paid for a particular item. That’s is very valuable information to have in a hyper competitive industry. Retailers choosing PayPal won’t have to fear any conflict of interest now and in the foreseeable future.
You can read my comment with E-Commerce times here.