Amazon Will Challenge PayPal And Other Online Payment Service Providers

| About:, Inc. (AMZN)

The world's largest online retailer Amazon (NASDAQ:AMZN), on Oct. 8, 2013, launched a new service named "Login and Pay with Amazon." This service will facilitate 215 million of its active customers to shop from any other participating online merchant site through tablet, mobile, and desktop devices.

According to Tom Taylor, Vice President, Amazon Payments:

"Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with to access their account information safely and securely with a single login."

Millions of online shoppers who hold an account with Amazon can now shop, on any participating merchant site, without signing-up or registering for third-party services. Furthermore, the customers do not have to share the personal information such as a credit card number with the participating online merchants. The merchants will be benefited from Amazon's huge customer base, technological advancements, and low pricing for the payment services.

Customer benefits

  • Personalized buying experience without creating additional account:

The shoppers registered with Amazon will not have to create a separate account to shop from the participating merchants. Instead now the customers can use their Amazon account to login, shop and pay.

  • Privacy

The customers will not have to share their credit card information as Amazon will not share the customers' credit card information with the participating merchants.

  • Security

All the purchases will be covered by Amazon's A-to-z Guarantee, offering buyers the same transaction protection they receive when purchasing products on

Participating merchant benefits:

  • Another payment option

The participating merchants can now offer one more payment option to their customers.

  • Customer experience

This will enhance the experience of the customers as they will not have to create an addition user account. Moreover, as all the purchases will be covered by Amazon's A-to-z Guarantee the customers will feel much more comfortable when placing an order.

  • Low prices

Amazon is well known for its technology and low pricing. With this service the participating merchants shall get simple and low pricing for the payment services.

  • Brand image

Amazon is the largest online retailer and is one of the most recognized and trusted brands in the online retailing space. The participating merchants, particularly the newer and smaller ones, will get benefits from this brand image and service quality of Amazon as all the purchases will be covered by Amazon's A-to-z Guarantee.

Amazon's benefit

This launch will benefit the company in multiple ways:

  • Increased offerings:

Its customers will be able to shop from a much higher number of sites with the same trust and security.

  • Increased online presence:

This service will give more exposure to the company and also allow it to build a strong associate network.

  • Increase its presence in the online payment market:

It will increase its presence in the online payment market. According to the estimates, the online payment market will be about $2,700 billion in 2015. Amazon has everything that is necessary to become a big player in the highly profitable online payment market: brand, customers, customer trust and technology. The only area where the company lags is the third-party integration. With the launch of this service, the company will remove the last remaining hurdle to become a major player in the online payment market.


The new launch will prove a major milestone for the company as far as its presence in the alternative online payment market is concerned. This will increase its web presence considerably as more and more online merchants will like to integrate this service due to Amazon's huge customer base and its brand strength. However, the company may be reluctant to add participants at a rapid pace as it will not want to compromise its standards for customer services. For other service providers like eBay (NASDAQ:EBAY) PayPal, Google (NASDAQ:GOOG) wallet, MasterCard (NYSE:MA) PayPass Wallet and by Visa (NYSE:V), this means more competition.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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