If Amazon’s adventurous plans materialize as the firm has announced, brick-and-mortar retailers may soon offer customers the option to pay their checkout bills via Amazon’s Kindle and a credit card reader.
Although Amazon says the plan is still on the drawing board and subject to change, delay or even cancellation, if retailers take on the Kindle system competition in an already over-stuffed field of checkout procedures will heat up even more.
Major checkout systems currently serving the retail sector include PayPal, a unit of EBay, Verifone Systems, NCR and newcomer Square. Apple may also soon become a bigger player, using its iPad and iPhone, which are already being used by some retailers as a payment system, to capture a larger market share.
With several well-established checkout and payment methods now in use, Amazon reportedly may first concentrate on penetrating smaller retailers rather than the giants.
To facilitate its planned move into this new area, Amazon acquired outside technology and a new engineering staff. Amazon is the nation’s largest e-commerce retailer.
Behind the scramble for a foothold and eventually dominance in the checkout area is the size of the brick-and-mortar sales market, which represents more than 90 percent of all transactions.
A bonus for Amazon, if it establishes a presence as the preferred checkout system of some retailers, is the new credit card data it would add to its base of information on more than 230 million credit card customers.
There’s two major obstacles for Amazon, however, say some industry observers. First, Amazon has little or no background as a checkout system provider.
And second, Amazon may be selling some of the same goods sold by the retailers it hopes to serve. Will merchants want to partner up with a competitor?
To surmount this obstacle, Amazon may offer discounts, promotions and other inducements to sign up retailers.