Amazon, one of the world’s largest and most profitable stores, wants your Amazon account to pay for more than just towels and toiletries. On Wednesday, it launched Amazon Pay Places, a new service lets Amazon customers place an order ahead in brick-and-mortar stores.
“One of the things we’ve been doing the last couple of years is thinking about how to connect merchants with the Amazon customer base, knowing they are very active connected shoppers whether online or on mobile,” Patrick Gauthier, vice president of Amazon Pay, told Pymnts.com. “With what we are taking the lid off today — we are enabling merchants to instantly reach people who are highly mobile and very desirable as customers — without having to worry about app distribution.”
Amazon Pay Places works a little like PayPal. Next time you are planning to pick up an order at a store or restaurant that is partnered with Amazon, you will be able to launch the Amazon smartphone app, make your selection from the Programs & Features section of Amazon’s mobile app, and save it to your cart. Once you have finished shopping, you will see an option to pay with one of the debit, credit, or checking numbers associated with your Amazon account.
Amazon sees Pay Places as a solution to what it calls the “app problem” — a majority of people do not bother to download merchants’ apps. According to ComScore, about 30 percent of Americans downloaded fewer than zero apps in 2016. That is opposed to the Amazon app’s install base, which Gauthier said stands at about three out of four phones in the U.S.
It’s a slow rollout, though. Pay Places, which launched in beta earlier this year in luxury clothing merchant Moda Operandi, will work only at select TGI Friday’s locations in Boston, Philadelphia, Baltimore, Washington D.C., Richmond, Virginia, and Wilkes-Barre, Pennsylvania starting later this year. But Amazon intends to take Amazon Pay Places beyond restaurants, according to TechCrunch.
Pay Places is an expansion of Amazon Pay, the digital payments platform the online retailer launched in 2007. Since then, Amazon’s brought it to France, Italy, and Spain, and opened it to global partners including PrestaShop, Shopify, Future Shop, and more than 50 others.
Amazon’s efforts have paid dividends. In February, Amazon announced that more than 33 million customers used Amazon Payments to make a purchase, up from 23 million in April 2016, and that payment volume doubled in the same period.
It is a lucrative business. Amazon charges 2.9 percent plus 30 cents per transaction — less than the 27 percent it charges eateries on its Amazon Prime Now Restaurants food delivery platform, and on par with PayPal’s fees.
But Amazon’s overtures could threaten its relationship with a would-be partner: PayPal. In January, the retailer discussed letting shoppers pay for Amazon purchases using their PayPal accounts, according to Bloomberg.
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