Amazon is rumored to be developing their own Alipay and Paypal clone and it would dramatically change the landscape of credit card payment processors. Sanford C. Bernstein & Co bases its view on signs that Amazon is creating a branded staged wallet payment service that it could leverage. The Seattle e-commerce giant also has AWS ready to handle the technology load of processing payments if it moves in that direction.
Lisa Ellis, a Sanford C. Bernstein & Co. analyst. said in a recent statement to Bloomberg that “This scenario involves taking a page out of the book of what EBay did with PayPal and Alibaba did with Alipay, and building up independent wallet service based off of the Amazon Pay wallet.
Amazon has hinted that it may be moving in this direction, Ellis said, as it promotes its branded checkout button on merchant websites and offers members of its “Prime” program 2% rewards when they use their debit card to reload a gift card.
At a minimum, Visa and Mastercard face long-term risks like pricing pressure and “brand obfuscation” as Seattle-based Amazon’s influence continues to increase. PayPal’s available market has already shrunk as Amazon, which doesn’t offer a PayPal checkout button, has accounted for a big chunk of the growth in U.S. e-commerce.
It will be interesting if Amazon moves in this direction. Over 65% of US households have a Prime membership and being able to buy things from niche websites with your Amazon account is compelling. I think in the near future Amazon is well positioned to: process payments, lend money to suppliers and even buyers, substitute most if not all retail shops, producing industrial products for retail buyers and so on.