Amazon's new service can add trust and ease of use for online buyers who want to make purchases from other Websites.
Amazon thinks its new 'Login and Pay with Amazon' service will make it simpler and less risky for online buyers to make purchases from other businesses by using Amazon's existing transactional system that customers already trust—the same system through which customers make tens of thousands of purchases each day.
The new service, which Amazon is offering to other online businesses, would simplify logins for users and reduce the number of individual accounts they have to maintain to make purchases from online sellers, while providing other companies with a pool of buyers who already shop online, according to Amazon.
"Amazon has more than 215 million active customer accounts
," Tom Taylor, vice president of Amazon Payments, said in a statement. "Login and Pay with Amazon
enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login."
By using the payment service, participating companies can allow their customers to move from browsing to buying in just a few clicks by logging on with their Amazon account information, according to Amazon.
A key reason for the new offering is that many online buyers are bothered by the hassle of registering on a multitude of Websites to make individual purchases, the company stated. By using the Amazon login and payment credentials that those same customers already have, they can make transactions from other companies easier and reduce the ordering hassles they have with multiple accounts and payment options, according to Amazon.
Login and Pay with Amazon can be used with tablet, mobile and desktop devices. No customer credit card information is shared with the other vendors when buyers make their purchases, and the purchases are covered by Amazon's online buying guarantee, the company stated. The customer information that is used is the same information that is used for purchases at Amazon.com.
The Login and Pay with Amazon service can be added to existing vendor Websites using widgets and APIs that can be embedded on the sites and integrated with back-end systems, according to the company.
For participating companies, the cost for the use of the Amazon payment system starts at 2.9 percent of the transaction and also a 30-cent per transaction fee for orders at $10 or more,
according to the company's payment schedule. Higher monthly transaction volume brings in lower fees.
Participating companies already include Autoplicity.com, GoGo Air and Build.com.
Two industry analysts said the new Amazon program could be a boon to Amazon, buyers and other merchants who want to sell to customers.
"It not only simplifies things for small business owners who are good with promoting their products but not so good with how to sell them, but I think it also helps with consumer confidence because there is strength in numbers and Amazon has a pretty big bankroll to make sure this is safe and secure" for buyers and participating sellers, Dan Maycock, an analyst with Slalom Consulting, told eWEEK
For Amazon, it takes advantage of a well-proven system the company already has in place while giving other retailers an established transactional front end that they won't have to build themselves, said Maycock. "This makes it even more accessible and it makes e-commerce as safe as possible and as convenient as possible," especially for smaller companies that don't have the resources to build robust online transactional systems.
Rob Enderle, principal analyst of Enderle Group, told eWEEK
in an email response that the new Amazon service makes a lot of sense for sellers and buyers.
"I think it is a great way to monetize sales that come from other vendors and it creates a viable competitor to PayPal and Google's offerings, both of which created risk for Amazon," wrote Enderle. "Their one button approach is a defensible advantage, it is far faster than PayPal or using a credit card service, and it does result in more sales for the related vendor and more revenue for Amazon."
Amazon often debuts innovations in the world of online retail. In August, Amazon added fine art
to the categories of items that shoppers can buy from the e-commerce giant, which already is the leader in selling books, CDs, DVDs and more online. The fledgling Amazon Art category on Amazon's site includes more than 40,000 works of art
from about 4,500 artists that are being offered for sale by more than 150 galleries and art dealers in the United States, Great Britain, the Netherlands and Canada.
By selling artwork online through Amazon, the company hopes to extend its presence into a new market that it hadn't previously explored, according to the company.