E-retailers must focus on their specific goals and examine a vendor’s reputation and market expertise, not referrals.
Its reported acquisition of mobile point-of-sale service provider GoPago points in that direction. GoPago would give Amazon the technology to compete with other players engaged in both e-commerce and mobile payments, such as eBay, Google and Square.
Amazon.com Inc. has reportedly acquired GoPago Inc., a mobile point-of-sale software and services provider that enables retailers and restaurants to use card reader-equipped tablets and smartphones to check out customers and allows customers to use an app to order and pay for goods and services before they arrive at a business. GoPago’s Italian owners have talked with Italian media about the acquisition, but not U.S. media. Amazon.com and GoPago did not immediately respond to requests for comment from Internet Retailer.
It may be that Amazon.com, which operates an online marketplace, is bolstering its payments capabilities to compete with other companies that offer marketplaces and mobile payments, including eBay Inc./PayPal, Google Inc., Groupon and Square, says Colin Sebastian, an analyst for investment firm Robert W. Baird & Co.
“Large web platform companies building advanced capabilities in mobile payments and POS systems pose the most immediate challenge to smaller-scale and emerging online payment companies,” Sebastian writes in a research note today. “Over time, we continue to see existing marketplace battles online extending to payments, with Amazon, eBay/PayPal, Google and Apple being the most likely to succeed.”
Amazon.com also potentially could use GoPago technology to help tie its online marketplace to bricks-and-mortar stores, similar to eBay’s efforts to integrate physical store listings into its marketplace and mobile apps, or the e-retailer could even use the mobile payments technology in possible Amazon bricks-and-mortar stores, Sebastian adds.
Amazon.com currently offers Login and Pay with Amazon, which lets customers on PCs, tablets and smartphones use their Amazon credentials and default payment information to quickly pay for goods on participating e-retailers’ sites and apps. Amazon has more than 215 million active customer accounts, the e-retailer reports. By comparison, eBay/PayPal has 137 million active customer accounts for its payments services, eBay says.
But PayPal dominates the so-called alternative payments market, while Amazon’s payment systems have limited traction off of its own site in large part because merchants are hesitant to provide Amazon, which many view as a competitor, with access to customer and transactional data, Sebastian writes.
As for GoPago, retailers pay $69 a month for software and services; that does not include hardware, including tablets or smartphones and the card-reader dongles that attach to the mobile devices. Most web-hosted point-of-sale software providers charge between $50-100 per month for general functionality; the up-front cost of hardware varies based on how many mobile devices a retailer elects to use, Sebastian writes. The costs are well below those for conventional POS software and cash registers, he adds.
GoPago has seen its greatest success with small to mid-sized retailers and restaurants averaging around $500,000 in annual sales, Sebastian writes. “Over time, there is apparently no reason that large merchants wouldn’t install cloud-based mobile POS software, as tablets will soon be able to provide at least as good technology as the legacy POS providers at a much lower price,” he writes. “The larger merchants just take longer to make decisions and legacy installations are a little tougher to replace.”
GoPago competitors include Revel, Shopify and ShopKeep.
In a recent study on digital wallets, Forrester Research Inc. found 38% of North American online consumers would trust PayPal to provide them with a wallet while only 23% would trust Amazon.