PAYMENTS: Amazon working towards digital wallet retail adoption

News broke that Amazon is back at trying to push its payments rails adoption into retail. The gist seems to be that it plans to do QR payments using the Amazon app in restaurants and gas stations as a pilot. No NFC reader necessary. This is regular customer behavior in much of the Asian world, but foreign to Americans who still cash in wet-signature checks at their local bank. We've discussed financial products within Amazon's strategy before -- mere features to increase platform adoption. In this way, pushing its wallet into physical commerce from e-commerce makes sense, as it increases the number of people who might want a digital Amazon wallet used for consolidated shopping. The other notable point is that Amazon has Whole Foods and other retail properties, which means it can choose to be its own first customer (as per the Strategy framework).

So where can this go? Looking at Hong Kong, both Ant Financial and Tencent have announced a plan to add QR codes as a payment method to the public transport system. Instead of tapping a credit card against an NFC chip, or swiping a Metrocard, or (worst case) dropping in a metallic coin, commuters will just use a payments app that takes a picture of the code, and automatically send a payment in that encrypted direction. For reference, 92% of China's 970 million mobile users have already used mobile payments. 

Further, Switzerland is planning also to introduce a QR-based billing system into the economy. These can be used at both the consumer and enterprise level, with B2B payments as a particularly compelling use case. Instead of entering in IBAN numbers and bank accounts, a generated QR code can contain all of this information inside the image. Perhaps this type of initiative can work to train enterprise users for QR adoption, and spread into consumer mind-share. As a relevant aside, transferring digital assets via QR codes read by an app on your phone (perhaps a phone running a local wallet) would be one way that crypto currencies make their way into the mainstream economy.


Source: WSJ (Amazon pay wall), The Verge (Amazon), Stratechery (Amazon), TechCrunch (WeChat, Finextra (Switzerland), UBS (Swiss QR)