It’s almost like the U.S. Treasury licensing the dollar to foreign countries. Amazon yesterday announced it would make its automated payment program available to third-party merchants and became an instant competitor to Apple Pay, Google Wallet, and PayPal. With some 240 million active customers, Amazon’s consumer reach is double that of PayPal’s. Apple has 800 million iTunes subscribers, but lacks Amazon’s ongoing relathionships with thousands of third-party merchants.
“Now they’re branching their payment system out to that broader network” says Tom Caporaso, CEO of Clarus Commerce, which runs the subscription-based retail aggregator FreeShipping.com. “Think of the halo effect the Amazon brand can have on newcomers to online retail, especially the smaller ones. You enter the business with millions of names and credit cards already on file.”
The Amazon Payments Partner Program has three levels–premier and certified partner, as well as certified developer–which qualifies partners for various levels of planning, account management, and tech support services. They’ll be listed on Amazon in a special directory and will be able to use a partner designation logo. Certain partners will be eligible for co-marketing activities.
“The Amazon Payments Partner Program provides partners with the tools and resources needed to extend the trust and convenience of the Amazon experience to their customers,” said VP of Amazon Payments Patrick Gauthier in a press release. Participation in the program is free, though for now it is available by invitation only to merchants in the United States, the United Kingdom, Germany, and Japan.
Though merchants clearly have much to gain from such an alliance with Amazon, they might have something to lose, as well, Caporaso notes. “Think of all the trouble involved for a retailer in acquiring a card, processing it, setting up one-click functionality. This is all there for them in the Amazon system,” he says. “On the other hand, as a merchant, you have to question what level of data you are sharing with Amazon. Amazon is, at its core, a data company.”
