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Login and Pay with Amazon

Ajit Deshpande - - 0 Comments

Last week, Amazon announced the launch of its ‘Login and Pay with Amazon’ service for ecommerce companies. Purported to be a mutually beneficial initiative for both sides, this service will enable Amazon customers to seamlessly log in and pay on partner ecommerce sites using their Amazon credentials, while giving the ecommerce companies the opportunity to gain new customers from the Amazon user base.

Few interesting points to note here: First, there is clearly a need for a seamless ecommerce experience, with 72% shopping cart abandonment across all devices and 97% abandonment on mobile devices. Second, brick and mortar still accounts for more than 85% of all commerce. Thus, Amazon’s greatest opportunity is in growing both the number of global online ecommerce consumers as well as its own share of wallet with these consumers, and with 215 million users, Amazon brings massive scale in making this transition to pervasive online commerce a seamless one. Third, the whole notion of context relevance should drive people to adopt Amazon Payments as the ‘social login’ for ecommerce, just the same way as FB Connect feels appropriate for discovery/sharing, Google login makes sense during the consideration phase, and PayPal login feels proper for financial transactions. And finally, Amazon Payments provides the company with yet another avenue towards negative net-working capital – this potentially being the key aspect differentiating Amazon Payments from PayPal.

So, we now seem to have taken care of the need for seamless access across the entire awareness / consideration / purchase funnel. Logically, in today’s era of mobility and multiple screens, the next wave should then be around enabling cross-device security and fraud management around this social login based access. Two-factor authentication is already being tested, yet the longer term path around secure ecommerce would need to go beyond that and include wireless carriers, mobile wallets, card issuing banks, and regulatory oversight – exactly the kind of ecosystem Opus portfolio company Payfone is starting to enable in partnership with bank fraud prevention consortium Early Warning Systems. Security  will for sure be the next step around ecommerce, but for now, Amazon continues to wrap its arms around the ecommerce mega-trend, becoming the rising tide that raises all boats…

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