When small and medium-sized businesses (SMBs) are setting up payment options for their customers, these days they have many more options than cash, checks or a debit or credit card.
In fact, thanks to the entry to the market of a range of start-up FinTech players, as well as efforts from traditional banks – and even larger retailers – to be more innovative, there are now many more ways for smaller merchants to accept payments.
The rise of Amazon Payments
One solution that’s particularly growing in popularity is Amazon Payments. This enables consumers to pay for goods and services online using their Amazon account, so they do not have to give their payment card details directly to the business. Competing directly with the likes of PayPal, it promises regular users of the e-commerce giant a convenient way of making purchases across the internet.
At first glance, it may seem strange for other retailers to accept the payment – after all, Amazon is often portrayed as the behemoth of the online shopping sector, with its ever-expanding selection of goods that make it a major competitor to other merchants, both large and small.
However, the usage stats say otherwise. According to figures highlighted by Bloomberg, more than 23 million consumers have used their Amazon account to pay for items on other companies’ websites since the service was launched in 2013, and the number of companies accepting it tripled in 2015.
Greater convenience, greater trust
While some of the large enterprises to have embraced Amazon Payments include Southwest Airlines and Comcast for certain services, it’s in the SMB sector where a lot of the interest lies.
One of the main attractions to consumers of Amazon Payments is the convenience factor. Being able to simply sign in to their Amazon account to make a payment will be much simpler and faster than having to enter their payment card details on a new site.
What’s more, there is also a trust factor. In today’s age of cyber attacks and data leaks, many people are wary about handing over sensitive financial information online – particularly to small or less well-established merchants. However, many people will feel much more secure knowing their details are held by a familiar household name.
Benefits for businesses
However, it is not just to consumers that services such as Amazon Payments appeal. The solutions can also bring a range of benefits to small businesses.
For instance, Peter Grant, general manager of AuthenticWatches.com, told Bloomberg that the service is a great time-saver, allowing him to be more productive and focus his efforts on other crucial activities – something that is often vital for small companies working under limited resources.
He noted one of the major bonuses of using Amazon Payments is that he does not have to run checks to verify his buyers’ identifies, as this is all taken care of by Amazon. As the company deals in high-value items, with transactions frequently running into thousands of dollars, this peace of mind is essential.
Opting for Amazon Payments may well be a case of weighing up the pros and cons for many firms. One the one hand, they are opening themselves up to a major competitor, but on the other, having access to Amazon’s millions of existing customers can be a huge benefit. And with the added convenience of the payment solution, they can expect this to translate into greater customer satisfaction and higher sales.