Amazon challenges PayPal with 'Login and Pay with Amazon'

Amazon challenges PayPal with 'Login and Pay with Amazon'

Amazon is taking on PayPal with a new service that lets online shoppers use their log-in details to make purchases on other e-commerce sites.

Tom Taylor, VP, Amazon Payments announced the new initiative to delegates at Money2020 in Las Vegas. Following hard on the heels of announcements from competitors including Don Kingsborough of PayPal, Ariel Bardin of Google Payments and Sarah Friar of Square, it is clear that established e-commerce brands are staking claim to become the preferred payment mechanism for the internet.

Success will be based upon the elegance of the consumer experience, confidence in the brand and the scale and depth of pre-existing consumer and merchant relationships. In this battle for scale and ubiquity, Taylor claimed that Amazon starts the race with some 215 million active accounts.

Says Taylor: "Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login."

Sites that sign up to the system will get access to widgets and APIs so that they can add a button at the checkout which gives customers the option to pay by entering their Amazon usernames and passwords.

The move is a direct challenge to PayPal, which has long dominated the online checkout. As the world's biggest e-commerce site, Amazon says that the system benefits customers by eliminating the hassle of having to register at multiple sites, remembering ever-growing numbers of logins.

Merchants benefit because customers are less likely to abandon purchases, while the system also helps replace 'guest checkouts' with 'recognised customers', meaning that firms can track orders and purchase history detail, and offer special discounts.

However, Amazon will not share card details with participating retailers. It will also charge a fee for each transaction, although there is no monthly charge and free fraud protection is thrown in.

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