Amazon’s Chances as a Mobile Payments Titan

September 26, 2017         By: Steven Anderson

With mobile payments being a clearly lucrative opportunity to those who can establish any kind of market, and one that’s often complementary to other market efforts, it’s easy to see why so many firms are getting involved here. With only a handful of companies actually managing to do the job well, though, it’s worth wondering why anyone else would want to take a shot at it. New reports suggest Amazon’s eager to try, and it could be a big deal in the making.

One analyst, Deborah Weinswig with Fung Global Retail & Technology, believes that Amazon could come out ahead in the mobile payment wars thanks to its enormous user base. Weinswig points out that there are over 310 million active Amazon users—due disclosure, I’m among them—and if even a fraction of them turn to Amazon for payments, even beyond Amazon, it could be a winner.

Others, like Computerworld’s Evan Schuman, don’t believe that this is necessarily enough. An Amazon user base may not migrate to using the Amazon payments platform at, say, Aldi or Starbucks. Additionally, there’s not much incentive for Amazon to offer a mobile payment system to let shoppers buy things in brick-and-mortar stores when Amazon would likely rather said shoppers buy said things on Amazon directly.

However, if Amazon had its own payment processing system, even if it just got used on Amazon proper, Amazon would likely be able to get some fresh cash flow in that way. The funny thing about most mobile payments systems so far is that they’ve been complements. Starbucks’ system is in addition to its coffee and merchandise sales. Apple’s is run alongside its mobile device and wearables sales. It goes on like that for much of the line.

It stands to reason, too, that if Amazon can produce a noteworthy mobile payments experience, and then make that payments experience valid outside of Amazon, then it could get at least some users to stick around for convenience’s sake, especially if they’re already heavy Amazon shoppers. In that way, an Amazon mobile payment app could get bumped up to the top of the chain. But even if Amazon is a minor success at this front, it’s still a success.