Amazon Checkout: Do You Really Wanna Get In Bed With Amazon?

Big news in alternative payments this week: your friendly neighbourhood Amazon has just launched it’s challenger to PayPal and Google Checkout – cleverly dubbed Amazon Checkout. For 2.9% + $0.30 for all transactions over $10, 5.0% + $0.05 for transactions under $10, and tiered volume discounts above $3,000 per month, you too can offer patented 1-click ordering.

There are a few reasons you might consider adding Amazon Checkout to your roster of payment options, including:

  • Access to 81 million (no, I didn’t forget a decimal) people already hold Amazon accounts. This is roughly 30% more than PayPal. Customers would not have to create a new account to checkout with you, nor share any additional personal information. If a customer has multiple billing and shipping addresses on file with Amazon, that can be very convenient for the customer.

  • Through IP-targeting, Amazon can recognize customers and display the 1-Click checkout for them.

  • Show cross-sells and upsells in your cart. And if you show Amazon products in your upsells (eww), you can earn Amazon Associate commissions.
  • Call it a halo effect, but having the option to checkout through Amazon Checkout may carry some brand equity – provided experience with the Big A was positive. Plus, Amazon customers are likely aware of the A-to-Z Guarantee, which you now offer by virtue of the Amazon Checkout option.

Amazon promises increased conversion: “Amazon’s familiar checkout experience, 1-Click ordering, A-to-Z Guarantee, and tens of millions of customers who can checkout without re-entering information helps you optimize conversion on your website.”

But Scot Wingo was apt to point out that Amazon Payments comes with a price:

Amazon’s biggest weakness in general in the world of ecommerce technology like this is that they are trying to be both a technology provider to retailers and a competitor. Large retailers (TRU, Borders, etc.) have left Amazon’s third party business en masse because of this and I don’t imagine they will be jumping for joy to add Amazon’s checkout to their sites. For example, you won’t be seeing add this any day soon.

This actually plays to PayPal and Google’s advantage and I’m sure as a first response we’ll see them play up these fears: “Do you REALLY want Amazon seeing all of your transactions, learning about your top sellers and then using that data to compete with you?” The fact that Amazon has a well documented history of using partner data to their advantage in the third-party selling world will make this argument very believable.

What do you think? Would you test out Amazon Checkout or do you think the risks outweigh the benefits?

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