Amazon rules the roost when it comes to e-commerce marketplaces in countries like the US, but today it’s announcing a deal that it hopes will be a start its plan to have that same kind of ubiquity outside of its walled garden. The company has inked a deal with Worldpay for the latter to become its first acquirer.
This means that Worldpay — one of the more ubiquitous providers of payment technologies, processing 40 billion transactions worth some $1.7 trillion annually through 300+ payment options and 120 currencies — will now be offering Amazon Pay as part of that mix, so that any merchant can offer this as a payment and shipping option to its customers.
Importantly, this would also allow Amazon, over time, to layer on further services into the mix for merchants, which could potentially include netting third party merchants into its popular Amazon Prime subscription scheme for free shipping and more.
“It’s a good question, but we’d prefer not to speak about our future plans,” Patrick Gauthier, VP of Amazon Pay, told TechCrunch when asked about Prime and whether it could become a part of the Worldpay offering. “Today the announcement is about the extension of our footprint. It will lead us into more opportunities to grow the value proposition for buyers and merchants, but I will reserve discussion about that for the future.”
The deal is being announced the same week that Worldpay had some other news of its own: it’s getting acquired by Fidelity National Information Services in a $43 billion deal. Asif Ramji, chief product and marketing officer at Worldpay, speaking to TechCrunch about the Amazon Pay news confirmed that the acquisition will have no impact on this Amazon deal.
Gauthier said that the initial focus of the deal will be to cover digital payments mainly for online merchants, although not just on websites per se. “The focus is on the connected experience, and we are leaning into other kinds of connected devices TVs,” he said.
The lure for merchants goes something like this: linking into Amazon Pay gives buyers an option to select from a list of active addresses and payment options that they will already be using to buy on Amazon. This, in turn, will make it less onerous to fill out details to complete the transaction — and therefore less likely for the sale to fall prey to the “shopping cart abandonment” that scuppers many an online transaction. That would be even more the case on screens where a user might not have a keyboard and so inputting information is even more of a pain, such as on a TV.
To be clear, in a nutshell, this quicker process, added convenience, and increased security (no need to re-enter card details), are the promised benefits of all digital wallets. Amazon’s unique selling point, however, is that its particular set of data is already widely used, and therefore more likely to be used again.
The other 95%
We once reported on some research that found that Amazon accounted for nearly half of all online commerce in the US, but only five percent of all retail spend. As a long-term plan to continue growing its business, Amazon has been working on ways to extend its reach outside of the world of Amazon for a while now.
While some efforts in areas like point-of-sale services, for example, have largely fallen flat, what’s interesting in this Worldpay deal is how Amazon is willing to concede a bit of control in its effort to change that track record and tap into that bigger market.
Ramji noted that Worldpay actually built Amazon a custom API to integrate Amazon Pay on to its platform and to create the ability to tap into the data around shipping and cards that Amazon can subsequently provide to merchants. That implies that this will, for now at least, be something that only Worldpay will be able to provide to customers.
What’s also very notable in this news is how Amazon Pay / Worldpay might help Amazon bring in more transactions under its Amazon Prime subscription umbrella.
While Gauthier would not comment on whether Prime might be offered as an option at checkout at any point in the Worldpay integration, he did note that the company has quietly been testing using Prime outside of Amazon for a while now.
“As a matter of fact we have had instances of doing that already,” he said, noting that the fashion retailer All Saints currently provides the same Prime shipping benefits to its customers if they happen also to be Prime subscribers. “It has been very successful in terms of customer conversion and lift, and to capture new customers.” He also noted that the company ran tests during Prime Day in 2018, testing using Prime with third-party merchants to understand the potential opportunity it might have here. “Yes, we have had interest from merchants if and when we decide to go further with Prime.”