Digital Transactions Authoritative, insightful and timely information for payments professionals
Online retailer Amazon.com Inc. has taken another step to broadening the reach of its payments service with the debut Friday of an in-store payment service at a New York apparel retailer. This marks the first time Amazon payments has enabled in-store payments with a merchant, Amazon says.
Just a couple of weeks ago Amazon announced its Payments Partner Program, an invitation-only program targets e-commerce developers and platform providers to help them add a pay or Amazon log-in button to their checkout pages.
The latest development involves Moda Operandi Inc., a New York-based fashion retailer that operates several trunk shows—sales events for showing merchandise to staff or select customers. The new service will be available online, in-store, and the retailer’s trunk shows, an Amazon spokesperson tells Digital Transactions News in an email.
It works like this for face-to-face transactions: A consumer browsing the Moda Operandi Web site selects a couple of items and places them into the shopping cart. She sets up an appointment with a Moda Operandi stylist. As she nears the studio, she receives an alert on her smart phone that the stylist is ready. Concurrently, the stylist receives an alert informing her the customer is ready. The consumer tries on her selections.
After making a purchase decision, the consumer, who checked in at the location using the Amazon mobile app, simply tells the stylist to complete the transaction. Because the consumer checked in with Amazon, and stored her payment card data in her Amazon account, the stylist completes the order on her end without requiring the consumer to retrieve her mobile phone or payment card. The consumer can simply say “Charge my Amazon account.”
“No longer will you need to stand in line to check out or pull out your credit card or even pull out your mobile device,” Patrick Gauthier, Amazon Payments vice president, says by email. “Using Pay with Amazon, Moda Operandi customers will be able to bring their online shopping cart into the physical world and check out instantly using their Amazon account information, continuing the shopping journey from online to in-store. Together with Moda Operandi, we’re creating experiences that delight customers and break down the barriers between the online and in-store shopping experience to create one seamless shopping journey.”
Amazon’s payments moves provoke some doubt about how well other retailers might embrace them. The online expansion dramatically broadens Amazon’s reach and is a smart move, Thad Peterson, senior analyst at Boston-based Aite Group LLC, tells Digital Transactions News. “I’m not sure the physical world is as important as Pay with Amazon is into other Web sites,” Peterson says.
The in-store Pay with Amazon is more akin to an experiment at this point, Peterson says, “but it is a rollout.” Amazon’s move to expand its online acceptance is more aggressive, especially in light of its plans to develop internet “Buy” buttons and with its virtual assistant Alexa-enabled devices, he says.
Amazon’s foray into handling payments for other retailers—via its partner-development program—may not be favored as much by large retailers as it might be by smaller ones, adds Jordan McKee, senior analyst at New York-based 451 Research LLC. “The hope is that by making onboarding easier, merchants will be inclined to consider Amazon as a payment partner,” McKee says via email. “However, it’s hard to imagine any large retailer would be shortsighted enough to display the Amazon brand at the most pivotal moment of the shopping journey.”
He says most tier 1 and 2 merchants have a deep-rooted skepticism of Amazon’s ambitions in the payments space, which is manifested in Amazon’s merchant roster that is dominated by “obscure brands and small businesses that would benefit from aligning themselves with the Amazon brand.”
Pay with Amazon will always be relegated to small businesses, and retail verticals that remain somewhat distant from Amazon’s core business, McKee says. “This constrains its overall value to users and makes it difficult to compete successfully with players like PayPal.”
Amazon says it will conduct similar exercise with other retailers in coming months.
