According to details gleaned from a recently uncovered patent filing with United States Patent and Trademark Office, online retail giant Amazon may soon enter the mobile payments industry. The “Anonymous Mobile Payments” patent application describes a highly secure payments system enabling users to pay for products and services without the vendor ever gaining access to sensitive buyer information.
“In a typical transaction, information about each party is typically exchanged to facilitate the electronic transaction,” the patent filing reads. “Some of this information may be personal or private information that a person may not desire to share with a stranger.”
While the mobile payments industry is already teeming with secure solutions – Square, GoPayment, PayAnywhere, etc. – Amazon apparently sees a lucrative opportunity in this burgeoning market. But is it really wise for Amazon to make the move into mobile payments today?
Despite the company’s financial wherewithal and venerable brand name, there are three compelling factors that Amazon must carefully consider before diving head-first into the mobile payments business.
1. Consumers are comfortable with current options
In late 2012, Sam’s Club – the nation’s eighth largest retailer – became the latest retail juggernaut to make the PayAnywhere mobile credit card reader available to millions of customers. With industry leading solutions known for their security and reliability already available to the masses at every turn, even a retail gargantuan like Amazon may have a difficult time competing in a market where there are no weak leaders.
2. Consumers already feel secure
Despite the troubling prevalence of identity theft and credit card fraud, the overwhelming majority of these unfortunate incidents don’t result from mobile payment transactions. As a result, consumers haven’t expressed many security fears with regard to mobile payment solutions. For this reason, Amazon’s strong emphasis on security doesn’t necessarily address any profound worries present in today’s market.
3. The mobile payments industry doesn’t need Amazon
When Amazon introduced the Kindle Fire tablet in 2011, it was touted as a quality, affordable, and sorely-needed competitor to Apple’s iPad. Serving a clear market purpose, the Kindle Fire has been a massive success. In the mobile payments space, however, Amazon’s role – and purpose – would be much less clear. According to the latest industry projections from Javelin Strategy and Research, the mobile payments market will reach $5.4 billion by 2018. Of all payment methods, mobile payments are projected to see the highest compound annual growth rate over the next five years. And the industry simply doesn’t need Amazon to get there.
So… is Amazon wise to consider entering the mobile payments space? Or could this be a costly mobile payments mistake? Please weigh in with your two cents below.