Digital Payments: Why Amazon Pay is here to stay
Digital payments are here to stay.
The pandemic has accelerated the use of digital payments in retail commerce across payment types and demographics, according to McKinsey. A recent report found that more than three-quarters of U.S. shoppers use some form of digital payment and the share of consumers using two or more digital payments methods is on the rise — jumping from 45 percent last year to 58 percent in 2020.
Digital wallets are the go-to choice for purchases worldwide as well. Another survey of 13,000 consumers in nine countries including the U.S., Canada and U.K., found 63% of respondents are more likely to shop at a retailer if it accepts the digital payments they use.
“Digital wallets are the leading payment method across both [ecommerce and point-of-sale payments] accounting for almost half of all ecommerce payments” says Anatolii Iakimets, Senior Product Marketing Manager, Bold Commerce. “But when we dig deeper and look into the split of transactions across regions the picture becomes really interesting.”
In the video below, Iakimets outlines what payments methods are popular in which locations and other digital payment trends brands should be paying attention to, including:
- Digital wallets dominate in the APAC region accounting for 60% of all ecommerce transactions.
- In North America, credit cards are the most common payment method followed by digital wallets while in Europe, ecommerce payment methods are the most diversified across all categories.
- What transaction details reveal about consumers’ shopping behavior.
- The rise of buy now, pay later (BNPL) such as PayPal Credit, Klarna, Affirm and After Pay.
- The use of cryptocurrencies as payment methods.
“There are a lot of payment methods and their adoption is constantly changing. Because of this, any successful ecommerce solution needs to provide a variety of pre-integrated payment methods and support quick onboarding of new ones,” says Iakimets.
Recently, Amazon has made efforts to increase its share of the digital payment space with Amazon Pay. While Amazon lags behind PayPal and others, it does have strong brand recognition and is using innovative products like Amazon Go and large-scale sale events like Prime Day to nudge shoppers toward adopting Amazon Pay.
With Bold Checkout Suite, Amazon Pay is a pre-authorized payment option along with other express options, such as Apple Pay, Google Pay, and PayPal. This makes it simple and fast for brands to add multiple payment options to their checkout to make it easier for customers to shop.
What is Amazon Pay?
Amazon Pay is an online payments processing service owned by Amazon. It allows shoppers to use any of the payment methods connected to their Amazon account to make purchases for goods, services, and more on non-Amazon websites, apps and other channels, including the voice-assistant Alexa. Currently, Amazon users can add a credit card or debit card as a payment method to their Amazon account. Amazon also offers a credit card, called the Amazon.com store card, however it is only accepted by selected vendors.
What are the benefits of Amazon Pay?
Like other express payment options such as ShopPay, Apple Pay, Google Pay, the main benefit of Amazon Pay for shoppers is making a checkout easier, faster and secure. By using Amazon Pay, shoppers can skip the step of entering their payment and shipping credentials into the checkout when making a purchase.
For merchants, the benefit of express payment options, like Amazon Pay, is reducing friction in the checkout process. Offering more payment options can prevent shoppers from abandoning their cart because they don’t have their credit card on hand, or simply don’t want to go through the trouble of entering their information.
How can shoppers use Amazon Pay to make purchases?
To allow shoppers to use Amazon Pay on an ecommerce site, brands must add the Amazon Pay button to their checkout.
In Bold Checkout Suite Amazon Pay is a pre-authorized payment option other express options, such as Apple Pay, Google Pay and PayPal.
Once installed, shoppers simply select Amazon Pay as a payment option, login to their Amazon account, and the necessary payment and address information will be passed to the brands website for an expedited checkout.
A recent study from RSR found that 91% of retailers say digital wallets / contactless payments technology provides value for their organizations. In the post-pandemic era, customers will expect the convenience of the digital payments that they have become used to online when they shop in store or in any other shoppable moment. Brands positioned to accept digital payments across all existing shopping channels will deliver a differentiated and delightful experience for consumers.