Amazon Raises Competition With PayPal

AmazonWhen we purchase things online, there are a wide range of payment options that go beyond simply entering our credit card information. Many sites utilize PayPal, Google Checkout, and other payment services. Amazon recently decided to step up their game in this realm by launching a new services called “Login and Pay with Amazon.” This service is similar to PayPal, but can it compete? Many companies view Amazon as a major rival, which may be detrimental to the success of their new payment service. However, adding this trusted payment option may have the potential to further increase conversion rates on checkout pages.

Login & Pay With Amazon

With this new service, consumers will see a new button on participating websites that prompts them to Login and Pay with Amazon. Much like you can login and pay with PayPal on eBay, Etsy, and more, this service allows users to login with their Amazon information and ensure that their transaction is secure. Login and Pay with Amazon expands upon Amazon’s current Login with Amazon feature, which allows users to login with their Amazon IDs on a range of other sites, including Kickstarter.

Can Amazon Compete With PayPal?

By launching this new service, Amazon has struck a direct blow to PayPal. Amazon currently has 215 million active accounts, a user base that surpasses PayPal’s by almost 40%. However, Amazon also has the disadvantage of being a serious competitor for nearly every retailer out there. Many businesses may not want to add the Amazon option for fear of customers being able to find their purchases for a lower cost on their website.

In addition, Amazon does not plan on sharing customer data with the retailers who make use of this service, which may dissuade companies from instating this option. Currently, Amazon has only two partners for this platform: Gogo, a wireless provider for airplanes, and, which sells furniture.

Conversion on Checkout Pages

Despite the obstacles Amazon faces to Login and Pay with Amazon, retailers may choose to make use of this service for the conversion benefits. Using well-known payment methods, such as PayPal, and other trust symbols has been proven to increase the rate of customers who follow through with a purchase upon reaching the checkout page. Such trust symbols also include security badges, lock icons, and buttons labeled “secure checkout.” The benefits of Amazon’s massive customer base may outweigh the risks.

Will you use Login and Pay with Amazon on your e-commerce site?

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Elizabeth K

Elizabeth Kent is a recent graduate with an M.A. in Women’s and Gender Studies from Brandeis University. She earned her B.A. from Smith College with a major in the Study of Women and Gender and a minor in Jewish Studies. Elizabeth recently relocated from the Boston area back to Western Massachusetts, where she spends her free time volunteering with a local non-profit organization. Elizabeth has worked as a writing tutor, archival intern, research assistant, and retail associate. Her interests include studying pop culture, kittens, and making meals with as little cooking as possible.

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