The Amazon Phone: A Mobile Payments Solution?

April 17, 2014         By: Michael Foster

As rumors of the Amazon Phone continue to mount, many pundits are trying to figure out why the company is entering this competitive market.

The answer might be mobile payments and microtransactions.

If the rumors are true, the Amazon phone will be a low cost, high-end device, with a 3D screen, six cameras, a huge 4.7 inch screen, and 2 gigabytes of RAM on board. These impressive specs would make it top of the line, yet it is expected to come at a low price point.

Much like the Kindle and Kindle Fire, the device is about getting people on an Amazon platform to make transactions. Re/code recently discovered that CEO Jeff Bezos has been pushing the company’s mobile payments team to work faster at getting a micropayments service up and running.

The idea makes sense; with hundreds of millions of customers and customer data on board worldwide, Amazon is well positioned to attract a corner of the micropayment market. Also, the company has an unusually clean history when it comes to security breaches, and is trusted by consumers much more than many other companies.

With a phone, the company could have mobile payments built directly into the operating system, and could facilitate transactions from person to person or from consumer to merchant seamlessly and in real time. Plus, Amazon could easily process these transactions with or without the credit card companies.

Most sources predict the phone will arrive in June, and it may cost less than the iPhone 5c.