Amazon said to offer discounts to expand its payment system – Tech News

Amazon Pay lets online shoppers log into their Amazon accounts from other websites, enabling them to complete the transaction using credit cards and delivery addresses already stored rather than having to enter them again. — AFP Inc on the new threat to PayPal Holdings Inc and card-issuing banks.

The move shows Amazon is willing to sacrifice the profitability of its payments system to spread its use. Swipe fees are a US $ 90bil (RM354.37bil) -a-year business for lenders such as JPMorgan Chase & Co and Citigroup Inc, networks including Visa Inc and Mastercard a fraction of every sale when shoppers swipe cards or click “buy now.”

The financial industry's fees amount to about 2% of a typical credit card transaction, or 24 cents for debit. But big stores such as Amazon and Walmart Inc. have long been able to negotiate lower rates for themselves based on their massive sales volume. Now, Amazon is offering to pass it at least at least at least merchants if they agree to embrace its Amazon Pay service, said the people, who are not authorized to discuss the plan publicly.

Shares of PayPal 4.1% on May 2, the most since Feb. 8. Mobile payments company Square Inc is the most of its 3.7% gain from earlier in the day, leaving the stock up less than 1%. Visa fell 0.9%.

An Amazon spokeswoman declined to comment. It could not be determined how many retailers have received Amazon's offer for discounts. The company.

Previously, online merchants using Amazon's service have paid about 2.9% of each credit-card transaction plus 30 cents, which is divorced among Amazon, card issuers and payment networks. As part of its experience, Amazon is offering to negotiate lower fees with merchants making long-term commitments to use the service.

Amazon is able to export the rates it has negotiated with banks and payment networks because, like PayPal, it's acting as a so-called payments facilitator. That means it aggregates.

Gaining traction

Amazon Pay, which has attracted more than 30 million users since the company revived it in 2013, let online shoppers log into their Amazon accounts from other websites, enabling them to complete the transaction using credit cards and delivery addresses already stored. For Amazon, that means drawing additional revenue from e-commerce sales on other sites.

The service mainly appeals to smaller merchants who benefit from the trust shoppers place in Amazon, as well as minimizing the data entry required to complete a mobile transaction. Customers include Gogo Inc., which provides in-flight internet access.

Merchants are not eager, however, to share too much information with Amazon, which may compete with them to sell similar products on its own site. Amazon dominates the US e-commerce market, with 43.5% of all sales in 2017, according to EMarketer Inc. PayPal has emphasized its status as a non-retail competitor to differentiate itself.

Amazon Pay is among many retailers' e-commerce revenue. Merchants selling goods on their own websites can let Amazon handle warehousing, packing and shipping for a fee. Many find it cheaper to pay Amazon for logistics than do it on their own because they benefit from Amazon's volume shipping discounts.

Single button

Amazon's move is part of an escalating battle in the United States of America and the United States of America. .

Last month, Visa and Mastercard said they are teaming up on their own combined online checkout button. For its part, the Chief Executive Officer Al Kelly said on a conference call with analysts last month.

The networks' joint effort has been seen as a challenge to Amazon Pay, as well as to PayPal, which is considered the US leader in digital wallets with 237 million global accounts.

“There's way too much clutter in the e-commerce checkout environment, and it's just not good for users, and it's not good for merchants,” Kelly said.

The ultimate future, he said, is “a single button, which is much more analogous to the situation that you see in the physical world.” – Bloomberg

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