retail news in context, analysis with attitude

Amazon.com announced yesterday that it has created a new service "that streamlines how customers transact with online merchants. 'Login and Pay with Amazon' allows participating companies to empower customers to go from browsing to buying in just a few clicks using their Amazon account information." The program "helps replace guest checkouts with recognized customers, leading to improved services which could include: managing and tracking orders, purchase history detail, special discounts, instant access to shipping addresses and payment methods."

"Amazon has more than 215 million active customer accounts," says Tom Taylor, VP-Amazon Payments. "Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login."

USA Today writes this morning that "the new service is a direct challenge to PayPal, which currently dominates the online payment business with a long-running service that lets consumers buy on websites using their existing PayPal credentials.

"PayPal has managed to fend off multiple challengers over the years, however, Amazon's massive existing customer base and the account information it has stored on these shoppers may be a big draw for some other online retailers."

Meanwhile, Time reports that PayPal is offering its customers free two-day shipping, with no annual fee ... hoping to compete with Amazon Prime, which offers two-day shipping for an annual fee: "Shoppers who make purchases with the websites for participating retailers - there are nine total, including Sports Authority, Levi’s, Aeropostale, Dockers, and PBS - automatically get free two-day shipping within the U.S. when they use PayPal at checkout. No minimum purchase is required."
KC's View:
Love the PayPal idea as a way of leveling the playing field, though I'm not sure that it will put a dent in Amazon's efforts.

Though retailers that use Amazon's program should keep in mind that while they are getting access to more than 215 active Amazon customer accounts, those customers may be getting even greater exposure to Amazon's business model. Step carefully.