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Amazon Payments' transaction volume surged in 2015
[CHICAGO] Amazon Payments' transaction volume surged in 2015, a sign that Amazon.com Inc's payment service is finally gaining traction after its inception nearly eight years ago.
The service allows customers to use their Amazon accounts to pay for goods on another retailer's website. Customers sign in to their Amazon accounts on the site where they are shopping, avoiding the necessity of entering their credit card or shipping information.
Payment volume through its "Pay with Amazon" service on other retailers' sites rose 150 per cent in 2015 from a year earlier, Amazon said on Tuesday. The average size of an order was US$84 during the same period. The company did not provide total value of those sales or other financial details.
Pay with Amazon, which competes with PayPal Holdings , Apple Pay and Samsung Pay, was started in 2013 after several unsuccessful attempts by Amazon dating back to 2008 to get a payments business off the ground.
Payments could represent a major revenue source for the world's largest online retailer if it is able to duplicate its success with Amazon Marketplace, which allows independent sellers to compete with Amazon on Amazon's own site. Amazon Marketplace now contributes more than 40 per cent of Amazon.com's total revenue.
Online payment checkout services available on some retailers' websites make the payment process easier for customers. They also give the payment platform a slice of every transaction online.
Amazon charges merchants fees for each transaction, which amounts to 2.9 per cent of the order value plus 30 cents.
Amazon said the number of merchants using Pay With Amazon grew by 200 per cent in 2015, but did not reveal the total number of merchants involved.
The company has previously said it is targeting middle-sized and smaller businesses. The draw for these smaller retailers is Amazon's 285 million account holders, whom they hope will make purchases on their websites.
Citing a study by analytics firm comScore, Amazon said 60 per cent of Pay with Amazon's users have income higher than US$100,000. The company also said that more than 23 million Amazon customers have used their accounts at non-Amazon merchants over the past two years.
Pay with Amazon is available in 170 countries including the countries in the European Union and Japan.