Amazon Pay was set up in 2007 as an alternative to eBay’s PayPal. Originally for use on the Amazon online shopping platform, it is spreading its wings ‘offline’ and many bricks and mortar retailers are not happy.

The company is piggybacking Worldpay that enables payment systems for 1.1 million US merchants via Visa, Mastercard and American Express. It is a backdoor arrangement that puts Amazon Pay in the checkouts of its bricks and mortar (offline) competitors who should be scared – very scared. Amazon may have access to users purchase data in addition to its online sales data.

Amazon says retailers should embrace Amazon Pay – after all, it owns the relationship with 300+ million US users – potential new customers.

“We see so much opportunity for innovation across the full customer journey with Alexa. Voice today is where mobile was in 2010,” said Patrick Gauthier, VP of Amazon Pay. “Amazon Pay will not be limited to just buying things with voice.”

Amazon says it is currently available at tens of thousands of online merchants in 19 countries and an unspecified number of physical store and restaurant checkouts in the US. Amazon Pay offers Prime members a one-click payment and fulfilment experience.

Gauthier said (in a posting that has since been taken down), “Amazon Pay now the alternative to PayPal, our business is growing at a fast pace, and we are poised to continue redefining consumer identity and payments.”

Amazon said payments are not a means to horde customer data: It only collects the final payment amount, or total order value (including date and time), which is necessary to process the transaction. When Amazon processes merchant payments its API does not collect product details or line item values, so merchants’ data is secure.

But some retailers disagree

But Griffin Carborg, senior specialist at Gartner L2’s Amazon Intelligence team disagrees,

“Despite any safeguards, any information Amazon can acquire about purchase or behaviour patterns is a concern for brands. Even if Amazon only gets high-level transaction data, enabling Amazon Pay remains a double-edged sword for merchants. Amazon Pay now enables the retail giant to bring retail data that lived outside of the Amazon ecosystem into the Amazon ecosystem.”

Pretty well everything Amazon does is to gather your shopping data and draw you further into its garden. You can be assured that Amazon will start using this data to make you offers you can’t refuse to shop with it instead of elsewhere.

Major retailers are saying “There is no additional value proposition for the merchant. It just feeds the insatiable Amazon analytics engine.” Others refer to Amazon’s online dominance in the US as “The bringer of the retail apocalypse”.

Amazon Pay