Amazon Plans Move Into Physical Payments

Online retailer could offer a Kindle-based checkout systems for use in physical shops

Online retail giant Amazon is planning an ambitious move into the physical payments market, offering shops the chance to use Kindle tablets and credit-card readers instead of checkout and ordering systems, sources believe.

The company may also offer retailers access to some of its other services, such as website development and data analysis, in an attempt to boost interest in its technology, sources told the Wall Street Journal.

shopping online store ©Andrey_Popov shutterstockReal world

Amazon may base its move on technology it acquired from GoPago Inc, a San Francisco start up that offered checkout systems linked to a smartphone app, which was acquired by Google last year.

Customers are buying more online, with recent research estimating that UK customers alone will spend over £100 billion in 2014, but up to 90 percent of all retail transactions still occur in actual shops.

Amazon will be approaching smaller retailers, who use a wide range of payment technologies, as opposed to major chains who already have their own systems in place. Partnering with smaller retailers would also allow Amazon to promote deals or offer vouchers to use in specific stores, similar to its existing Amazon Local daily deals.

Recent estimates state that Amazon may hold credit card information from more than 230 million users, far ahead of rivals such as PayPal or eBay, and introducing a physical payment system could provide the company with a mass of data from consumers’ in-store spending habits.

A move into the physical payments world might also see Amazon creating a mobile wallet system similar to Google’s Wallet service, which would have credit card information stored on it to speed up payments. The company has already made steps in this area, having last year rolled out a one-click digital button for processing online and mobile payments on other retailers’ websites using Amazon customers’ credit cards.

Amazon is not the only major company looking to gain a share of the retail payments market, with Apple CEO Tim Cook hinting earlier this week that the iPhone maker may also be developing similar technology. On the company’s annual earnings call, Cook said the company was “intrigued” by mobile payments and said users “loved” being able to pay for content using Touch ID.

“It’s incredibly simple and easy and elegant and it’s clear that there’s a lot of opportunity there,” he said. “The mobile payments area in general is one that we’ve been intrigued with. You can tell by looking at the demographics of our customers, and the amount of commerce that goes through iOS devices versus the competition, that it’s a big opportunity on the platform.”

A move into physical payments would be the latest in a series of announcements from Amazon. The company recently raised eyebrows when it announced plans to introduce ‘Anticipatory Shipping’, whereby high-demand products are dispatched to shoppers before they even know they want them. Amazon also announced last year that it would be trialling delivery via unmanned drone, and hopes to implement the technology by 2018.

There is as yet no confirmation from Amazon regarding when these plan will see the light of day.

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