Amazon wants to make money off of you even when you’re not shopping on its website.
Because the company already has hundreds of millions of credit cards on file, it offers a service called Pay with Amazon that allows third-party retailers to let shoppers use their Amazon payment and shipping information at check-out.
And in a rare bout of transparency, Amazon just revealed that 23 million customers have used the service since it launched in 2013.
Using their Amazon login is convenient for customers who hate constantly re-entering their payment information, and that lack of friction ultimately helps drive conversions for retailers.
But how does it help Amazon?
Breaking it down, the company gets 2.9% of every transaction, plus a $0.30 authorization fee (it used to be refundable, but isn’t anymore).
When Business Insider talked to external payments VP Patrick Gauthier last year, he said that another benefit to the company is that customers that transact with third-party merchants with their Amazon contact info also visited Amazon.com more often.
Even though Amazon says that people who used Pay with Amazon in 2015 spent $84 on average, we don’t have enough data to really understand how big a business the service is for Amazon right now. We don’t know how many of those 23 million customers used it last year, or how many transactions each person completed. But we do know that it can’t be too big a business yet, because in Amazon’s earnings reports, payments falls in the “Other” category, along with the company’s advertising business. Last quarter, “Other” only accounted for $203 million of the company’s $15 billion in North American sales
However, it’s definitely a priority.
Last year, payments exec Tom Taylor told Re/Code’s Jason Del Rey that Amazon CEO Jeff Bezos was lighting a fire under his team, pressuring them to “go faster” to ramp up its payments business. Today, Amazon said that the number of merchants using Pay with Amazon grew 200% year-over-year and that customers using it grew more than 150% year-over-year.
In ChannelAdvisor’s annual retail survey last summer, the company highlighted Amazon Payments as a growing consumer identity service — the only one making any progress in catching up to PayPal as the foremost non-credit card payments provider:
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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