Amazon is asking traditional brick-and-mortar stores to start accepting its mobile payments platform, Amazon Pay, anonymous sources told The Wall Street Journal. The company has its sights set on gas stations and restaurants as well as other stores that don’t directly compete with its extensive retail offerings.
Amazon Pay, which has been around since 2007, has seen limited adoption. Currently, you can use Amazon Pay to shop online with “tens of thousands” of third-party merchants, including Dyson and bedding retailer Parachute, and make purchases in Amazon’s retail stores. You can also order products with Amazon Pay through Alexa-enabled devices. Amazon promises that shoppers will have no fees, and sellers will have minimal ones.
The Journal didn’t report how customers would use Amazon Pay in stores, like whether it would be by tapping their phones or scanning a QR code. But Amazon has incorporated QR codes into its own retail stores, suggesting it might do the same if other brick-and-mortar stores sign on. That would put it closer to China’s e-commerce giant Alibaba and its Alipay platform than a rival to Apple Pay, which relies on NFC technology.
There are a number of advantages QR codes have over NFC tags. Lower-end smartphones all have cameras that can be used to scan QR codes, while only a small percentage of phones have NFC tags. It’s also more affordable and feasible for a small business owner to print out some QR codes and tape them to a wall or desk, rather than invest in a pricey NFC terminal.
These advantages, plus difficulties in getting credit cards approved, and the fact that Alipay and its rival WeChat Pay, are already widely used, have made mobile payments via QR codes proliferate in China. They’re also seeing adoption in India. While Amazon has no presence in China yet, it is expanding its efforts in India and internationally overall. Later down the line, a QR code option in Amazon Pay could potentially attract global customers and make it competitive against an Apple Pay expansion. We’ve reached out to Amazon for comment.
That sort of wide adoption of mobile payments simply hasn’t happened in the US yet, where only a handful of retailers currently accept Apple Pay, Samsung Pay, Chase Pay, and etc. And attempts at getting QR codes adopted as a popular payment method have failed. The slow adoption is both a challenge and threat to Amazon’s current plans, but it’s also an opportunity for it to seize the market while it’s still relatively up for grabs.