Amazon is looking to extend Amazon Pay from online sales to brick-and-mortar transactions. The payment platform securely stores a customer's information for quick, convenient checkouts. Amazon Pay is different from payment platforms like Venmo, where customers can carry a balance and transfer funds to their bank accounts. Instead, it mirrors features found in Apple Pay, Samsung Pay and other digital wallets by storing customer payment information so users can pay for goods quickly.
While Amazon Pay is only officially accepted online right now, reports surfaced late last year that Amazon would be introducing its payment platform to some brick-and-mortar small businesses that don't directly compete in e-commerce. These businesses, which are likely gas stations and restaurants according to The Verge, would be among the first to accept Amazon Pay for physical transactions.
Amazon Pay is used by "tens of thousands" of online merchants, where customers can pay for products with just a few clicks. While Amazon Pay has been around for quite some time, it hasn't caught on, and this move has raised speculation around Amazon's digital wallet plans. This payment method has seen slow adoption in the U.S., with platforms like Apple Pay and Samsung Pay paling in comparison to platforms in Asia like WeChat Pay and AliPay.
It costs nothing for consumers to use Amazon Pay, but merchants will have to pay a small percentage per online transaction. It's not clear if these fees for merchants are being instituted at the brick-and-mortar level, although there have been reports that the company is offering lower payment processing fees and marketing services to get some brick-and-mortar stores on board. It's still very early, so Amazon isn't offering all brick-and-mortar locations the opportunity to complete transactions using Amazon Pay.
Is this good for small business?
The short answer is it's too early to tell.
Many online businesses feature Amazon Pay as a convenient way for customers to check out using a digital wallet. Extending this feature to non-competing brick-and-mortar businesses means Amazon is testing the waters in the digital wallet space. It's not clear whether Amazon's aims are good or bad for small business. If anything, it's the company's latest attempt to break into an emerging market and further increase its presence in the minds of its customers.
If you run an e-commerce business or sell your products online, offering Amazon Pay at checkout can add a level of convenience and security for your customers. Beyond these benefits, Amazon Pay doesn't seem to provide either consumers or merchants anything groundbreaking. Its presence in physical transactions at small businesses could one day be significant, but only if the digital wallet market heats up and Amazon can differentiate itself from competitors like Apple Pay and Samsung Pay.