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Should retailers work with Amazon Payments?

Written by Tom Ryan
Amazon last week announced an expansion of its Amazon Payments service to extend the trust and familiarity of "Pay with Amazon" to third-party e-commerce merchants. Relaunched in 2013, Amazon Payments enables customers to check out on some third-party e-commerce sites by simply entering their Amazon.com user name and password. The intention is for customers to avoid the hassle and trust issues involved in creating a separate login with the retailer and filling in credit card and shipping information. Last week, Amazon announced a Global Partner Program to integrate its payments option into software companies who power e-commerce storefronts for merchants. For example, Canada-based Shopify, one of the program's partners, provides software tools for 243,000 online retailers, enabling storefronts, payment processing and apps for checkout. "Our merchants want to offer their customers a payment solution that is trusted, easy and familiar," said Brennan Loh, director of business development at Shopify, in Amazon's statement. Other partners include Japan-based FutureShop and France-based PrestaShop. Participating merchants will also receive exclusive white glove services, such as seamless integration and knowledge sharing. The benefits range across three levels: Premier Partner, Certified Partner and Certified Developer. With fees similar to PayPal, one challenge for Amazon is overcoming retailers' reluctance to share transaction data. Amazon has said in the past that transaction data isn't shared and is private. Google and Apple are also expanding in the space. Yet Amazon Payments is gaining traction. Over 23 million Amazon customers have used their Pay with Amazon accounts at non-Amazon merchants over the past two years. While conflicts are expected to prevent larger retailers from partnering with Amazon Payments, smaller to medium-sized ones appear more open to offering convenience for their customers and gaining favor with Amazon's customer base. "It's easy to think of Amazon as a big bad competitor, and that's true," Josh Harbour, co-owner of e-tailer Red Dress Boutique, which has been using Amazon Payments, told Bloomberg. "But merchants have to find ways to compete with them in some areas and work with them, too."

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