Amazon announced on April 4 the expansion of Amazon Payments to more third-party websites, a move that puts their payment services in direct competition with PayPal, Visa and Stripe. The Amazon Payments Partner Program seeks to attract online retailers through offering them technical training as well as access to their over 200 million-active user base, according to GeekWire.
“The Amazon Payments Partner Program provides Partners with the tools and resources needed to extend the trust and convenience of the Amazon experience to their merchant customers,” Vice President of the payments service, Patrick Gauthier, said in a press release.
To make a purchase on a website that integrates the Amazon Payments option, customers log in using their Amazon account information, and can use credit cards, bank accounts or the Amazon Payments balance saved on their accounts. Amazon gift cards cannot be used on third-party websites.
It might seem strange that the largest online retailer wants to provide services to other e-commerce companies. Gautier notes that it deepens their relationship with customers. “We know [Amazon Payments] solves a problem in their lives,” he commented to Bloomberg.
Amazon recognizes that it can take advantage of its online presence even in helping customers make transactions on other sites. The company stands to benefit from expanding their brand presence, as well as from charging fees on transactions and gathering data about their users.
Businesses can benefit from outsourcing their payment processing since they can sidestep having to verify and manage accounts, in addition to appealing to a broader user base.
PayPal, still the biggest online payments service, faces competition with Amazon when it comes to small retailers especially. For instance, some retailers such as Red Dress Boutique saw the use of Amazon Payments surpass that of PayPal this week, while R. Riveter, a startup featured on Shark Tank, decided to make a complete switch from PayPal to Amazon Payments.
As Amazon continues to expand, it has begun targeting college students, many of whom find online shopping especially convenient. The brown-taped boxes are ubiquitous in front of residence hall rooms and Isla Vista apartments, with students ordering anything from textbooks to snacks to overpriced toilet paper. Amazon lures students in with six months of free prime membership, and last year even opened a physical storefront in Isla Vista.
“I think [the Amazon Payments Expansion] is awesome because I have an Amazon Store card. And there’s some things you can’t find on Amazon,” Janet Carrasco, a third-year at the University of California, Santa Barbara, said.
Amazon’s first partners include Shopify, OpenCart and PrestaShop. Their jump into shopping apps may be a prediction of future partnerships. Soon, students will be able to use Pay with Amazon on their favorite shopping sites and apps.