As the leader in e-commerce, Amazon boasts more that 200 million currently active user accounts, each with an associated credit card. Amazon has been holding this trump card close for a while now, and today has just presented Amazon Payments, the new payment method you can use to make purchases in stores that offer it as an option. Has PayPal met its match?
In recent times we’ve seen how the heavyweights of the online communications business are launching their own services of this sort. Among them is the recent TouchID system that the new models of iPhone aim to establish as a payment method based on fingerprint recognition. The simpler the payment method is for consumers the better, meaning that offering the ability to reuse one’s Amazon credentials to make purchases “with one click” might turn out to be an excellent move on the part of the company.
PayPal may have quite a lot to worry about. Currently its charges a small commission on transactions done on its platform as a bridge to your associated bank account, and it remains to be seen the type of rates that Amazon will apply with its own new service. This may just be the tip of the iceberg, with companies everywhere scrambling to expand their business model. That’s precisely the point of the new Payment Code feature that PayPal will launch in 2014, with which you’ll be able to make physical purchases in shops using your phone. What’s clear is that purchases with e-commerce services are still in their infancy in light of all that’s still to come.