What Login and Pay with Amazon Means for the Payment Industry

Oct 21, 2013 11:40 AM  By

It’s no secret that the line between payment and authentication providers has been progressively blurring with the rise of mobile, social and digital technologies.

Take Google, with its commerce venture, Google Wallet, a payments system that allows users to store various methods of payment and make secure payments via their mobile phones.

Authentication king Facebook also recently attempted to cross over into the payments realm with the ability to store and auto-fill users’ billing information.

Of course, this shift makes perfect sense: the brand that can create a pipeline for both identity and ecommerce will carve out a nice slice of market share for itself, capturing revenue through payment gateways while simultaneously building consumer trust.

Being able to track user identities and tie them directly to their purchase habits is an invaluable advantage for brands, allowing them to understand and convert consumers on an unprecedented level.

PayPal has clearly been the dominant player in the online payments game up to this point, allowing consumers on third-party sites to make payments via their existing PayPal accounts. PayPal was also the first to dip its toe in the payment/authentication water with Login with PayPal, which it introduced in 2011 and revamped earlier this year.

While some online payment upstarts have made noise in the past, most have either been acquired by the likes of PayPal/eBay (most recently Braintree), or simply haven’t gained enough traction to take on the payments giant.

Enter Amazon and its recently announced Login and Pay with Amazon offering. By combining the company’s authentication product with its website/application payments product, users can now login to websites using their Amazon credentials and checkout without needing to re-enter username and password – with credit card and shipping information pre-populated.

With these new features, Amazon has a huge opportunity to capture share of authentication and payments on ecommerce sites. The company’s positive brand perception as a trusted and reliable ecommerce platform is sure to prompt users to select Amazon as their login vehicle of choice, given the option. In fact, according to the 2013 Harris Poll, US consumers voted Amazon the most trusted company in America over the likes of Apple, Google and Disney (Source: The Daily Ticker).

By aligning their offerings with Amazon’s services and leveraging Login and Pay with Amazon, merchants could experience a significant boost in registrations and purchases. Amazon also has the infrastructure and proven ability to scale this new offering at a rapid clip.

Of course, the biggest advantage for Amazon is that, with such a large consumer-base, they already have over 215 million user records that include shipping, billing and credit card information. This level of pre-existing user information makes the barrier for entry for consumers extremely low.

Overall, the Login and Pay with Amazon offering could result in increased adoption of social login in general for brands, and heightened usage by consumers. Consumers have already shown a preference for social login, and logging into websites via Amazon and other existing identity providers like Facebook, Google and Twitter offers significant benefits for both businesses and consumers:

Faster, easier registration: Providing users with the ability to login via their existing social profiles makes registering for your website hassle free. New users don’t have to take the time to fill out their personal information, and returning customers don’t have to remember usernames and passwords. Making login more convenient results in more registrations and repeat logins; in fact, we’ve found that social login increases user registration rates by as much as 90%.

Reduction in shopping cart abandonment: 10% of consumers abandon their shopping carts because of lengthy check-out processes, and 29% dislike proprietary check-out forms (Source: Webcredible). Enabling users to login and pay with just a couple clicks, rather than having to fill out a detailed registration form, reduces points of friction and deters customers from jumping ship in the middle of the checkout process.

Permission-based access to user data: When consumers register for websites using their existing social identities, a dialogue box appears requesting permission to access specific data points within their social profiles. This approach to collecting consumer data boosts consumer trust and loyalty by increasing transparency and giving users control over the kinds of personal insights they share with brands.

Accurate cross-channel user profiles: While cookie data merely tracks user actions across desktop, login data ties consumer identities to a single, unique source, enabling marketers to create a single view of customer identities across channels and devices. Plus, consumers typically keep social profiles active for extended periods of time, and update them on a regular basis.

More relevant user experiences: With more complete pictures of consumers’ unique identities, brands can begin to create more relevant and personalized user experiences across channels. Customizing consumer touchpoints through location-based offers and tailored product recommendations, for example, makes customers feel valued, boosting loyalty, repeat conversions and long-term customer value.

Amazon is making substantial moves to own both identity and ecommerce and change the way brands and consumers connect. As social login becomes the new standard across the web, Amazon has an extraordinary opportunity to become a key player in the space.

With its army of consumers and depth of data, savvy e-tailers would be wise to consider implementing Login and Pay with Amazon.

John Elkaim is Vice President of Marketing at Gigya

  • dgates

    If Amazon extends this with an inclusive, location based “support local small business, you could buy this item at {a local store with local pickup} ” this is a real win/win/win. Interwebz ecomm is awesome but don’t lose sight that consumers LOVE local small businesses owned and operated by PEOPLE they know and have long established personal (i.e., IRL social) customer service relationships. My wife knows this.. The customers love the paw-printed recycled paper bags we use, they use them as gift bags!

    Bottom line… Sell as you will, customer service is always what brings ‘em back.

  • Dubguy

    This explains why Amazon hasn’t had a PayPal option available, but I really don’t see them being a big market threat. PayPal has the Bill Me Later option, as well as a HUGE chunk of existing online sales sites. I don’t see anyone dropping PayPal in order to switch to another service without incentive. The only place this will make a difference is on the Amazon site itself (which is huge), but beyond that: too little, too late.

  • uncledudley

    I used to use Pay Pal for the convenience until after more than ten years I received my monthly bill stating that my last payment was late and they were adding a penalty of $35.00. The post office had delivered it one day late. So my $18.00 dvd purchase was now $53.00! When I called the billing department, I discovered that PayPal was actually G.E. Finance.and that this is their policy.
    I am not a person who hates but I strongly dislike G.E. for any number of past experiences from faulty products and rude customer service reps. Had I known that I was actually doing business with them, I never would have used PayPal.