Amazon said Monday that it will expand its Pay with Amazon product, which it launched in 2013 to enable shoppers to use its payment platform to make purchases on other e-commerce websites.
As part of the new Amazon Payments Partner Program, third-party retailers receive benefits and services, including knowledge-sharing and white-glove integration services in addition to account management, planning support, technical resources and training, exclusive logos and co-marketing activities. The partner program is free, available by invitation in the U.S., Germany, the U.K. and Japan.
Amazon also is looking to acquire financial technology start-ups as their valuations settle down, a top executive told CNBC Tuesday.
Pay with Amazon is a PayPal-esque service that leverages the e-retail giant’s frictionless payment system and the consumer trust that it enjoys. That trust is key to the payments space online, according to much research, and could help push mobile payments, which have grown but have yet to replace consumers’ “top of wallet” credit card in any major way.
Amazon already enjoys an advantage in its vast and nimble search functionality: 44% shoppers search for products on Amazon, more than on search engines (34%) or rival retailers’ sites (21%), according to research from big-data marketing company BloomReach conducted by consumer research firm Survata. That’s a big jump from three years ago, when Forrester Research pegged Amazon’s search share at 30%. Amazon also enjoys top ratings for customer service and trust, according to Prosper Analytics.
Amazon clearly sees a path to becoming a more ubiquitous payments platform, and now that its payments business has racked up 23 million active users, the company is sizing up financial technology (or "fintech") acquisitions that could help it get there even faster.
"We created this business unit a year ago, now I'm starting to look at opportunities outside," Patrick Gauthier, vice president of Amazon Payments, told CNBC in an interview at the Money 2020 conference in Copenhagen. "After a number of years where fintech has been a little bit ahead of itself in terms of valuations things have come back to earth.”
Gauthier told CNBC that Amazon would be interested in startups that already have "good teams, people who have a focus on customers, and means through which we will be able to extend the number of user cases and number of places where we can roll out Pay with Amazon.”
This kind of aggressive incursion into the space will challenge PayPal, which has been on its own since its spinoff from eBay last year, as well as established credit-card companies like Visa and MasterCard that are developing their own digital wallets. It would also position Amazon opposite emerging commerce platforms Apple Pay and Android Pay.