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Amazon Offers Retailers Discounts To Adopt Payment System (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: Amazon is offering to pass along the discounts it gets on credit-card fees to other retailers if they use its online payments service, according to people with knowledge of the matter, in a new threat to PayPal and card-issuing banks. The move shows Amazon is willing to sacrifice the profitability of its payments system to spread its use. Swipe fees are a $90 billion-a-year business for lenders such as JPMorgan Chase and Citigroup, networks including Visa and Mastercard, and payment processors like First Data and Stripe, which pocket a fraction of every sale when shoppers swipe cards or click "buy now."
The financial industry's fees amount to about 2 percent of a typical credit-card transaction, or 24 cents for debit. But big stores such as Amazon and Walmart have long been able to negotiate lower rates for themselves based on their massive sales volume. Now, Amazon is offering to pass its discount along to at least some smaller merchants if they agree to embrace its Amazon Pay service. Previously, online merchants using Amazon's service have paid about 2.9 percent of each credit-card transaction plus 30 cents, which is divvied up among Amazon, card issuers and payment networks.
The financial industry's fees amount to about 2 percent of a typical credit-card transaction, or 24 cents for debit. But big stores such as Amazon and Walmart have long been able to negotiate lower rates for themselves based on their massive sales volume. Now, Amazon is offering to pass its discount along to at least some smaller merchants if they agree to embrace its Amazon Pay service. Previously, online merchants using Amazon's service have paid about 2.9 percent of each credit-card transaction plus 30 cents, which is divvied up among Amazon, card issuers and payment networks.
Any retailer that helps out Amazon in any way is dead, already. It's just a question of when. Relying on, or working with your largest competitor generally doesn't work out in business.
Best Buy started selling some new Amazon gadget exclusively a few weeks ago. That's the end of them.
I don't respond to AC's.
Square already makes it pretty cheap. And if you're lucky enough not to have problems with Paypal (I'm that lucky, so far) they do too. Making Amazon more powerful is not in anyone's best interests
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
they desperately want to track customers of other retailers; while at the same time, use the extra volume to leverage even lower transaction rates for themselves.
amazon is not being generous, they're being their data-whoring selves; and will use the extra data gathered against those same retailers who willingly gave it up to save a fraction of a percent in transaction fees.
Forgoing profits to build market share works.
Amazon forwent profits for almost 2 decades while building market share, originally just selling books.
I can see them easily outlasting many of the other pay schemes. (Despite the moaning of vendors and the promises of Libertarians, tt actually costs a certain amount of money to track a transaction and credit is a loan of money and that costs something, too.)
Amazon's own selection of dildos is fairly sparse and cheap, but thanks to Amazon Pay I could shop on a certain other "specialty" website without the worry of giving my credit card # to a sketchy website.
Best Buy has been dead for a while. The execs just hope it survives in zombie form for a little while longer so they can keep collecting their high salaries.
I know a few think crypto currencies are a scam, but the reality is that crypto currencies reduce the cost of doing business. We save about 3% every time a customer purchases from us and use a crypto currency over a credit card. There are also various other benefits like no charge backs which add another 3% or so saved. Then we also are able to get discounts up to 30% or so above and beyond what we have to otherwise pay for certain goods that we sell.
There are also programs in place where you basically get paid to spend money. It's crazy. But the way it works is when you make a transaction with crypto currency at a local retailer that accepts crypto currency you get back a small amount of crypto currency. For instance I am getting back $1-5 on $5-50 orders of food every day. I however eat out a lot and live in glorious freer part of the world called New Hampshire. And so we actually have lots of businesses accepting it in Keene and Portsmith and well all over the state. Even in tiny towns (villages? town constitutes two businesses; a gun shop and a BBQ restaurant) like Alstead half the businesses are taking crypto!
There are also companies like purse.io which let you purchase anything with free prime shipping off Amazon and get up to a 33% discount. That is possible because purse takes advantage of the liquidity in the market between what I believe are Amazon credits and Bitcoin. Basically it boils down to the fact people are willing to spend $x "worth" of there Amazon credits (that they earn from Amazon) on purchasing Bitcoin, but that comes at a cost, and so what purse does is connect those wanting to purchase something on Amazon with those wanting Bitcoin. To people in India and China and elsewhere that don't have Amazon those Amazon credits are worthless. But Bitcoin isn't. So it's a great opportunity for both parties to benefit.
Do dat be like uh one a dem uh android thaaaannnggzzzzzz u instawed on da fone?
Any retailer that helps out Amazon in any way is dead, already.
It can't be any worse than the Visa-MasterCard monopoly that currently exists.
Best Buy started selling some new Amazon gadget exclusively a few weeks ago. That's the end of them.
What? Best Buy is still in business?
Itâ(TM)s shocking theyâ(TM)ve been able to survive as long as they have...probably because theyâ(TM)re selling anything and everything tech they can.
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Have you timed a cryptocurrency transaction recently?
Consider, "Mastercard maintains 99.999 % availability and can process 3.4 billion transactions per day at 38,000+ transactions per second, with an average response time of 140 milliseconds."
Charge backs help keep retailers honest. There's no way I'm buying any physical items from non-thrift or non-grocery stores without the ability to cancel payment.
You think this is bad? In the PC video game market retailers have to force their customers to install their biggest competitor's adware/data collector/store app, i.e. Steam. Steam's owner Valve has a distribution monopoly on almost every PC game and retailers (online and offline) only sell download codes, whose redemption is at the sole discretion of Valve.
Amazon is so big now that it is impossible to compete.
They just take the loss, in the grand scheme of things, it's hardly a loss in their balance books. But as a competitor you won't be able to do the same without having to close doors.
On a long enough timeline, the survival rate for everyone drops to zero.
Is valve still making video games?
Amazon has never made a profit, I don't think. If they did, it was a small sector within the overall company. They knowingly expand, and take their yearly tax breaks on their losses, i.e. we are subsidizing Amazon's take over of all retail, and grocery with our tax dollars. Soon they will control the food supply (whole foods), do their own shipping, and control 50% + of the Internet (AWS). Now they want to muscle in on digital payment processing.
Amazon will eventually controll 90+ % of every aspect of our lives. They will allow the other 10% to exist so they do not appear to be a monopoly - which they already are.
You say the government should break them up. That's hilarious since the gov is our worst enemy, and support amazon (well, the globalist that own the goverment do), and a 'break up' would be meaningless. Heck, for years amzn didn't even charge for tax on goods. That's is a HUGE advantage over every other normal retail store.
When you talk about a cashless society, that is the world Amazon is creating right now. When they control 90% of all retail, and they don't take cash, what does that spell?
He who controls food / services controls those who rely on said services. Soon, very soon, Amazon will own you unless you know how to live off the grid, which means they will own you. If Amazon decides for any reason they don't like you, too bad, you are cut off - Amazon is your judge and jury.
Amazon is to be shunned at all cost. Bezos and crew are in no way your friend. Heck, look how they treat their employees if you want an idea of what they think of you, and me. https://sites.google.com/site/thefaceofamazon/
Kind of. They occasionally buy existing development studios and publish their games. Their main business is the Steam store these days. That and hats.
Isn't this exactly the textbook example of what Standard Oil did 100 years ago?
Paypal and Square will continue to dominate the small business because setting up an account takes literally minutes. On the other hand, when my wife and I tried to set up Amazon Payments for her small business some years ago, it took weeks to sort out all the paperwork, by which time we figured out that Amazon Payments didn't fit our needs.
For medium-sized businesses (like a modest fast-food chain or an Etsy-type site), Amazon Pay might make more sense. Large businesses will likely get screwed by Amazon - that's part of Amazon's business model these days - and can negotiate their own terms with the credit card companies.
Finding God in a Dog
The 2.5% credit card fee is nothing compared to the 15% Amazon commission.