In its second-largest acquisition, Amazon buys the company for $970 million.
Amazon Payments today launched Amazon PayPhrase as a new option for speeding up online checkout, including on the sites of retailers Buy.com and J&R Electronics.
Amazon Payments Inc., a subsidiary of Amazon.com Inc., today launched Amazon PayPhrase as a new option for speeding up online checkout, including on the sites of retailers Buy.com and J&R; Electronics.
At Buy.com, which launched PayPhrase today along with the Checkout by Amazon payment feature, PayPhrase promises to offer a new level of shopping convenience, Buy.com Inc. president and CEO Neel Grover tells Internet Retailer. “This new technology brings an exciting new feature into alternative payments,” he says. “We think our customers will want to use this during the holiday shopping season and beyond.”
The PayPhrase service is available on all web sites that offer Checkout by Amazon, which lets shoppers make an online purchase with a payment account stored by Amazon.com. To set up and use PayPhrase, shoppers register a personal phrase of two to four words-such as “Jake’s allowance” or “Home Sweet Home”-and a four-digit PIN tied to a payment card account.
Consumers can also tie particular shipping information to each personal PayPhrase term. When making a purchase on a web site that accepts Checkout by Amazon, a consumer can simply enter her personal phrase and associated PIN into a PayPhrase window to check out without having to enter payment card account or shipping information.
“We want to be more meaningful to the customer in how they can use their payment accounts, and make it more convenient for them,” says Matt Williams, general manager of Amazon PayPhrase.
Russ Jones, a payments analyst at research and consulting firm Glenbrook Partners, says PayPhrase complements the one-click checkout Amazon introduced more than a decade ago. While one-click checkout lets shoppers on Amazon.com click once to check out without having to re-enter payment or shipping information, PayPhrase recognizes that shoppers don’t always want to use the same payment account or ship to the same address.
“One-click checkout was a big breakthrough in checkout simplification because people often use the same card and ship-to address when buying online, but a lot of times they don’t,” Jones says
“It enables the shopper to use different shortcuts with a one-click experience for multiple ship-to locations and billing information,” Grover says. He adds that the availability of PayPhrase has made Checkout by Amazon a more compelling checkout application.
Using either the same or multiple PINs, PayPhrase users can create multiple PayPhrase customized phrases to designate different payment card accounts and ship-to addresses for different types of shopping, Williams says. A customer might use the phrase “Home goods” for making payments with a personal credit card for products shipped to her home, the phrase “Office supplies” for using a corporate card to buy legal pads and copy paper shipped to her office, and “Billy’s stuff” to let her teenage son buy clothes and DVDs shipped to home.
In addition to the security aspect of not requiring PayPhrase users to store payment account information on multiple e-commerce sites, PayPhrase also lets users control the online spending of other buyers they authorize to use their payment accounts, Williams says.
If an account holder lets her employees or children use a PayPhrase term to make online payments, she can set spending limits and log onto her PayPhrase account to check payment activity.
Scot Wingo, CEO of ChannelAdvisor Corp., which provides a range of e-commerce technology and services including helping retailers sell through third-party e-marketplaces, notes that Amazon PayPhrase underscores Amazon’s intention to be a big player in online payments.
He adds that eBay Inc.’s PayPal payments unit recently came out with a special student account service, which enables PayPal account holders to let their teenage children use a special PayPal debit card tied to their parents’ PayPal account. “It’s interesting to see Amazon come out with a counter-offering so fast,” Wingo says. “It points out they are pretty darn serious about payments.”
Amazon.com is No. 1 in the Internet Retailer Top 500 Guide; Buy.com is No. 33.