Amazon Offers Retailers Discounts to Adopt Payment System
bloomberg.com
bloomberg.com
Amazon dips its toes in this space all the time. It's hard to tell how serious they are.
Amazon Pay has been relaunched at least once.
Amazon Register (CC processor which competed with Square) died in 2015: https://bits.blogs.nytimes.com/2015/10/30/amazon-shutting-do...
Amazon Handmade (the Etsy killer) went nowhere and languishes. Surprised they didn't kill it yet.
Amazon WebPay shut down years ago: https://thenextweb.com/insider/2014/09/11/amazon-killing-fre...
How do merchants know the investment is worth it this time? (Especially if they may some day eat your market, once they have enough data on it.)
Why would you choose to be at Amazon's behest, when you can pay less and know you won't need to lift a finger for multiple years wrt credit & debit processing.
WTF? Where are they offering this!? Even if this is true, which sounds unbelievable, it's certainly not available globally
Grocers pay among the lowest rates for credit card processing, I think that was a big part of Amazon's very loud attempts at grocery. They don't care whether it succeeds if it knocks a few dozen basis points off their interchange rates!
The banker scans the document with a frown. He strokes his chin thoughtfully.
"Amazon.. Amazon. Where have I heard that.. Oh yeah, the grocer! Zero basis points!"Back on topic, different SICs[1] get different interchange rates from Visa, Mastercard and the like. Multiple companies have sued to lower certain SICs interchange rates[2]. Amazon's SIC has changed over time, and it could easily be argued that they fit into multiple SICs.
Its up to the sales org that handles them to appropriately code their SIC, Amazon could easily have switched to processing with a new platform for Amazon Fresh, and slowly moved most of their volume over without negative repercussions from Visa/Mastercard.
1 - https://en.wikipedia.org/wiki/Standard_Industrial_Classifica... 2 - https://en.wikipedia.org/wiki/Payment_Card_Interchange_Fee_a...
And this doesn’t even mention the itemized list of all stock that I might be selling that this larger retailer now knows about me….
People aren’t going to magically discover Amazon now if they process payments. Most retail shoppers are well aware they can buy the same items online for cheaper or at least the same price.
What retailers should really fear is a world where people no longer buy things impulsively or at the exact moment of need.
I've gotten to the stage now where I won't buy from another retailer where I have to create another account, if at all possible.
As consequence my online purchase history (aside from grocery shopping) for the past 3 years is almost exclusively amazon.
If I were a retailer I would be looking to make the buying process as slick and seamless as possible and, alas, amazon can provide me with a solution.
1) Customer buys product X from me
2) Payment is processed by Amazon
3) Amazon matches the customer with their own records, sends an advertisement for that same product, at a lower cost
4a) Customer returns product and buys from Amazon
4b) Customer orders from Amazon next time they need it
Edit: For the record, Amazon wouldn't even need to be able to identify the exact products you purchased, enough damage could be done based only on your businesses classification. Technology, clothing, houseware ect.
That said, for any retailer already selling on Amazon the risk is minimal. That is, they are already living with this and (I presume) don't care.
The only difference would be if that customer was not familiar with Amazon's offering prior to purchasing at your store. But only until we get concrete numbers and evidence can we conclude if that number who will be driven to Amazon would balance against the customers who are driven by advertising for more demand towards your store.
There's no way Amazon could lower the price enough to offset the hassle of dealing with a return - not to mention you often have to pay return shipping.
Customer: Wow, I like this $100 blender.
Amazon: You could have got it from us for <strike>$110</strike> we mean $80.
Customer: Damn, I paid too much, I guess I'll just shop Amazon first next time.
Keep in mind, this is already an Amazon customer. They almost certainly already shop Amazon first.
This is a given before you even start.
If you are using this, it's either because you are selling things Amazon doesn't sell (and despite how large they are, there's a ton of stuff like that). Or you have some kind of advantage over Amazon that they can not match.
If all you are doing is matching, or slightly beating Amazon, you already lost before you even implemented Amazon Pay.
About a year ago I attempted to use the Amazon Pay WooCommerce Extension but had to turn it off because it was basically taking over the checkout page, placing itself at the very top of the page above the other payment options (https://in30minutes.com/amazon-pay-woocommerce-extension-why...).
Another consideration: How many vendors want to give even more power to the Amazon juggernaut? I like dealing with healthy, balanced ecosystems, and right now Amazon has far too much power in my product niche (publishing). It sucks dealing with policy changes, neglect of the piracy problem, and the fear that my account may be summarily penalized because of some algorithmic tweak or obscure violation (recent example: "One or more of your products doesn't meet the financial threshold established by Amazon and is no longer eligible for advertising via Amazon Marketing Services." WTF does that even mean?)
The last thing I want to see is the payments space similarly dominated by a greedy, uncaring giantco that "owns" the customers coming to my website. The behavior with the WooCommerce extension made me realize how bad they can be.
With a credit card all it takes is a button press (or phone call) to reverse a charge and it gets with-held for about 90 days at best, and completely reversed with no recourse at worst. According to Stripe, card companies do not communicate back about the status of these disputes in any way, and no discussion is allowed except for one response from the merchant which requires you to send PDFs (mostly automated by Stripe). They don't even tell you if the customer withdraws the dispute and funds still get held for up to 90 days!. And valid reasons range from fraud (on the buyer side) to simply dissatisfaction with a product, all of which becomes the merchant's burden to bear. On top of that, to add insult to injury, the credit card company adds a fee to provide you with this terrible service.
PayPal, and most other "payment facilitators" do a much better job handling disputes. In PayPal's case they provide a much fairer arbitration process (funds are held by PayPal, and a website with message thread is created allowing communication between the merchant, customer, and arbitrator). The whole process happens within a span of days rather than months. And PayPal manages to do this without charging any more than credit card companies do (via Stripe et al). I've also done disputes through Affirm, a PayPal competitor, and they equally handled them in a fair and easy manner.
This ends up making credit cards super risky for smaller merchants if their transaction volume is low and transaction amounts are high. As someone who runs a small business I highly welcome these alternative payment facilitators, even if they charge the same rates as credit cards, because they do provide a much improved service over the old credit card companies, and that's even with all the convenience features services like Stripe provides.
How does this work if the customer paid Paypal with a credit card and initiated a chargeback? I get the credit card/user could be blacklisted but PayPal would still be out the money even if the seller won the arbitration case.
https://addons.mozilla.org/en-US/firefox/addon/disable-autop...
1. Find out what people are buying in stores and not on amazon, and figure out how to get them to switch
2. Use this data to target more advertising/recommendations across amazon
3. Use the purchase data to perhaps create whole new brick and mortar stores that cater to the most in-demand products in different areas, like a more targeted walmart -- squeezing out the stores that once bought into this program.
I'd say it's a short term win, at the sake of long term loss of stores.
That being said, companies like this should declare a non-compete with the businesses they're luring in. Chomp!
But from a customer perspective, I'd be glad for this to take off. I would prefer to checkout using Amazon as a payment processor than Paypal, and Square (seemingly the other prominent option these days) doesn't seem to let me use a single set of credentials across merchants, which is always obnoxious. From a customer perspective, I've had almost nothing but good experiences with Amazon, and most of the bad ones (delivery estimate issues) wouldn't impact this space.
I do not want to see Amazon analyzing my buying patterns across more vendors.
You probably can find similar pages for other companies.
To me it sounds like, "we are anonymizing your personal info, but you can opt-out and allow us to perform data analytics using your personal info as it is."
2. hemorrhage money while undercutting competition
3. Jack up prices once you've got enough market penetration to stick around or have killed your competition
So far Amazon still works without enabling it but I doubt that'll last.
I can't think of any other case that might apply for tying.