‘Easier to Pay’ mantra is making Amazon thrive

August 06, 2020 5:06 PM

Launched in 2007, Amazon Pay is taking on the giants. From cash to cards to digital money and financing small businesses, anything that can drive purchases on the platform is on its radar.

Amazon, Amazon Pay, Amazon Easy Pay, amazon paymentIt’s the money, honey, that is making Amazon thrive.

An e-commerce giant, over $1 trillion in value, has unleashed a juggernaut that is trying to muscle into the financial services business. Amazon’s scorching pace of growth may have become predictable but the way it is disrupting traditional industries could make more jaws drop. While the Amazon (NASDAQ: AMZN) stock crosses $3,000 this week, let us have a look at the encapsulating Amazon Universe in a two part story. The next disruption for Amazon could be in the financial services industry. As the tech giant carries out its experiments across countries like Mexico, India, Ivory Coast, Barbados, Chile, and more, it seeks to become a reliable trade partner for business.

At the heart of the issue is Amazon being able to offer consumers goods that can be financed at competitive rates. If that cauldron is tough to break into, it offers deals through Amazon Pay that can push more people to Amazon platforms.

The message? Spend more time shopping!

Committed to succeed

Small companies surprise the markets with their nifty moves. Large companies, on the contrary, keep nibbling with new experiments. Suddenly, one of them turns into a killer idea.

Amazon Pay’s story has been more of the latter. It could not quite succeed with earlier versions – Amazon Webpay, Checkout with Amazon, Amazon PayPhrase, and Amazon Local Register. Its latest version, Amazon Pay, is now looking to expand across apps as well as online merchants.

One step in making Amazon Pay omnipresent was announcing a partnership with Worldpay. It agreed to integrate Amazon Pay into the options for its customers.

Worldpay processes nearly 40 billion transactions worth $1.7 trillion annually, supports 300 payment types in over 100 currencies. That partnership puts Amazon Pay all over on websites and devices. Customers now had the option to pay in one click. A few months after the announcement, Worldpay was acquired by FIS in a $43 billion deal.

If payment processing is at the heart of the business, cash is no less. In 2017, Amazon allowed customers to deposit cash to a digital account without a fee at partner locations. It was designed to reach out to smaller businesses which may be underbanked or underfinanced. A little later, it even allowed customers to deposit spare change at one of the 20,000 Coinstar kiosks and exchange it for digital money with the Amazon cash app! Every drop in the ocean counts!

According to the 2017 FDIC National Survey of Unbanked and Underbanked Households, nearly 24.2 million US households were underbanked in 2017. It has now become a focus area for Amazon across countries.

Across over a dozen countries, including Kenya, Indonesia, Chile, Barbados, Costa Rica, and others, there is another option. With PayCode, consumers in 19 countries who have never made a purchase on Amazon can buy products and pay in cash via QR codes. It also helps Amazon understand the pulse of the market.

Online to everyday spending

With a little more than a whisper, over $5 billion in loans have been given to small businesses in US, Japan and UK. Now cards are being issued to small businesses and it already has 1 million customers. These small companies get access to business analytics, controls over employee spend with other discounts thrown in from Amazon Prime and other in-house brands.

Its co-branded credit cards are gathering steam and drive purchases at Whole Foods, Amazon and others. The payment convenience is slowly expanding from being available online only to everyday spends. When members of Amazon Prime use these cards, they get extra benefits, driving its perceived value with a larger part of the Amazon ecosystem.
Launched in 2007, Amazon Pay is taking on the giants. From cash to cards to digital money and financing small businesses, anything that can drive purchases on the platform is on its radar.

In all its forms, money does make the world go round.

Alternative – All finance is the oxygen that Amazon is looking to control. Stay tuned for our second part of the story to find out how it plans to do so.

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