Will Amazon Pay's Aggressive Expansion Succeed?
2018-12-06 13:53 Thursday
Apple claims that Apple Pay is now accepted at more than five million in-store locations in the U.S., and that number continues to grow. Likewise, Google Pay has a growing retail network, and since September, is now accepted at all 7-Eleven convenience stores across the U.S. The entry of Samsung Pay into the market has further raised the stakes.
Amazon has concentrated on integrating its digital payments into the lives of customers by persuading brick-and-mortar merchants to accept the Amazon Pay digital wallet. The company has its sights set on gas stations and restaurants as well as other stores that don't directly compete with its extensive retail offerings. However, retailers that view Amazon as a threat could resist the effort.
Amazon's ambitions for the U.S. market have been stymied by the slow adoption of mobile payments by American consumers. A relatively number of retailers accept Apple Pay, Samsung Pay, Google Pay, Chase Pay, and other digital payment wallets. Efforts to increase the popularity of QR codes have thus far failed. The slow adoption is both a challenge and threat to Amazon's current plans, and has led to a focus to Asia, where digital wallets and mobile-payment apps like Alipay and WeChat Pay are commonly used.
Amazon Pay, which was first introduced in 2007, has seen limited adoption. Currently, you can use Amazon Pay to shop online with "tens of thousands" of third-party merchants, and make purchases in Amazon's retail stores, as well as order products through Alexa-enabled devices without additional fees. Consumers typically upload their debit or credit card account to a digital wallet, and click the wallet tab on a merchant's website to make an online payment. With wallets capable of in-store payments, consumers hold the phone above a contactless checkout terminal to transmit the card information. Merchants that accept wallets generally don't pay additional fees beyond what they would pay for card payments.