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Amazon, Facebook look to differentiate mobile payments with data

Facebook and Amazon both bring a lot to the mobile payment industry in terms of data, but it remains to be seen how each will fare in winning over consumers and retailers to use their services versus an already-established competitor.

Amazon wants to speed up the launch of its payment strategy, according to published reports. At the same time, Facebook may be ready to give social commerce another shot with a new international-focused mobile payment program.

“Any company with a massive repository of consumer data is not going to be late to the game,” said Nathalie Reinelt, San Francisco-based analyst at Aite Group.

“The biggest hurdles mobile payment companies are struggling with are consumer and merchant adoption and which mobile payment technology will proliferate,” she said. “Brands consumers trust, and are already transacting with, have direct access to their user base to promote their new offering, making consumer adoption an easy obstacle.”

Speeding up mobile payments?
Amazon has been looking for ways to pitch its trove of data on consumer shopping to retailers for quite some time, and now supposedly wants to speed up the timing of a payment product that would let consumers buy goods via an Amazon account.

Last year, Amazon rolled out a product called Login and Pay, which lets retailers and merchants leverage log-in information to speed up transactions.

Additionally, Amazon is working on a mobile point-of-sale product that works with its Kindle tablets (see story).

Despite Amazon’s ambitions in this space, retailers have a well-documented dislike of Amazon for stealing sales.

“The challenge that Amazon has is really not about the consumer — the challenge they have is with merchants,” said Denée Carrington, senior analyst at Forrester Research, Cambridge, MA.

“Most merchants view Amazon as a competitor and are going to be reluctant to embrace them as their technology or payment solution,” she said.

Commerce goes social — again
Rumors that Facebook is once again looking to strike up its payment business show the social giant’s ambitions to be a prime player in the space.

However, Facebook’s previous attempts with virtual currency and gifts indicate the challenges that social commerce face.

According to a report from the Financial Times, Facebook is closing in on a deal in Ireland that would let consumers pay and store money via their account, similar to the services offered in Google Wallet and PayPal.

For example, PayPal-owned Venmo began to cozy up to brands including LivingSocial and HotelTonight last year as an in-app payment option (see story).

At the same time that Facebook is likely to face a list of challenges within the U.S., the opportunity to leverage social connections for international payments is interesting and could help Facebook differentiate its efforts from competitors.

Additionally, a Facebook mobile wallet could help the social media giant stir up some new advertising opportunities as the organic reach of the platform begins to wane off for brands.

In theory, a brand may be more willing to pour more money into Facebook ads if they know that a consumer has a set amount of funds sitting in their account.

“Although Facebook has been down this route before unsuccessfully, this is different because you are bringing in international clients with the potential of cross-border payment remittance,” said Sam Maule, management consultant at Carlisle & Gallagher Consulting Group, Charlotte, NC.

“This is an interesting nuance to peer-to-peer payments and a new one for Facebook,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York