July 29th, 2008 | 2 MIN READ

Amazon Checkout: Do You Really Wanna Get In Bed With Amazon?

Written by author_profile_images Linda Bustos

Linda is an ecommerce industry analyst and consultant specializing in conversion optimization and digital transformation.

Big news in alternative payments this week: your friendly neighbourhood Amazon has just launched it's challenger to PayPal and Google Checkout - cleverly dubbed Amazon Checkout. For 2.9% + $0.30 for all transactions over $10, 5.0% + $0.05 for transactions under $10, and tiered volume discounts above $3,000 per month, you too can offer patented 1-click ordering.

There are a few reasons you might consider adding Amazon Checkout to your roster of payment options, including:

  • Access to 81 million (no, I didn't forget a decimal) people already hold Amazon accounts. This is roughly 30% more than PayPal. Customers would not have to create a new account to checkout with you, nor share any additional personal information. If a customer has multiple billing and shipping addresses on file with Amazon, that can be very convenient for the customer.
  • Through IP-targeting, Amazon can recognize Amazon.com customers and display the 1-Click checkout for them.
  • Show cross-sells and upsells in your cart. And if you show Amazon products in your upsells (eww), you can earn Amazon Associate commissions.
  • Call it a halo effect, but having the option to checkout through Amazon Checkout may carry some brand equity - provided experience with the Big A was positive. Plus, Amazon customers are likely aware of the A-to-Z Guarantee, which you now offer by virtue of the Amazon Checkout option.

Amazon promises increased conversion: "Amazon's familiar checkout experience, 1-Click ordering, A-to-Z Guarantee, and tens of millions of customers who can checkout without re-entering information helps you optimize conversion on your website."

But Scot Wingo was apt to point out that Amazon Payments comes with a price:

Amazon's biggest weakness in general in the world of ecommerce technology like this is that they are trying to be both a technology provider to retailers and a competitor. Large retailers (TRU, Borders, etc.) have left Amazon's third party business en masse because of this and I don't imagine they will be jumping for joy to add Amazon's checkout to their sites. For example, you won't be seeing Wal-mart.com add this any day soon.

This actually plays to PayPal and Google's advantage and I'm sure as a first response we'll see them play up these fears: "Do you REALLY want Amazon seeing all of your transactions, learning about your top sellers and then using that data to compete with you?" The fact that Amazon has a well documented history of using partner data to their advantage in the third-party selling world will make this argument very believable.

What do you think? Would you test out Amazon Checkout or do you think the risks outweigh the benefits?

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