Cash, Plastic or Hand? Amazon Envisions Paying With a Wave
January 19 2020 - 12:28PM
Dow Jones News
By AnnaMaria Andriotis
Amazon.com Inc. wants to make your hand your credit card.
The tech giant is creating checkout terminals that could be
placed in bricks-and-mortar stores and allow shoppers to link their
card information to their hands, according to people familiar with
the matter. They could then pay for purchases with their palms,
without having to pull out a card or phone.
The company plans to pitch the terminals to coffee shops,
fast-food restaurants and other merchants that do lots of repeat
business with their customers, according to some of the people.
Amazon declined to comment.
Amazon, like other tech companies, is trying to further
integrate itself into consumers' financial lives, leaving banks and
card networks on edge. Apple Inc. introduced a credit card last
year, and Google is rolling out checking accounts. If the Amazon
terminals succeed, they could leapfrog mobile wallets such as Apple
Pay while expanding Amazon's already-extensive access to consumer
data.
Amazon's projects are closely watched both by tech and financial
companies, which are increasingly colliding in payments. Amazon has
been experimenting with payments at its Amazon Go stores, where
customers can walk out without stopping to pay. It has also been
building out Amazon Pay, a digital wallet that consumers can use to
make payments at online merchants not owned by Amazon. Chief
Executive Jeff Bezos has stressed the importance of financial
services and payments to some senior executives, The Wall Street
Journal previously reported.
The plans for terminals are in early stages. Amazon recently
began working with Visa Inc. to test transactions on the terminals
and is in discussions with Mastercard Inc., according to some of
the people.
Amazon has discussed the project with card issuers. JPMorgan
Chase & Co., Wells Fargo & Co. and Synchrony Financial have
expressed interest in enabling consumers' card accounts to work
with these terminals, according to some of the people.
Card companies are trying to figure out whether tech giants such
as Amazon intend to be collaborators or competitors, though some
believe it is safer to participate in big tech's payments ambitions
than risk being left out. Amazon, for its part, wants the card
companies' expertise in safeguarding consumers' card accounts.
Still, Amazon will have to allay the concerns of card issuers
and networks, including how the terminals would detect fraud. The
company will also have to win over customers wary of providing even
more personal information and navigate a climate in which
regulators are increasingly skeptical of big tech.
Amazon envisions that customers would first use the terminals to
link their debit or credit card information to their hands, the
people said. The company is weighing a few options for how to do
so, one of the people said. For example, customers might insert
cards into a terminal and then let the terminal scan their hands.
From then on, they would only need to place a hand over the
terminal to pay at a participating merchant.
Amazon recently filed a patent application for what it described
as a "non-contact biometric identification system" that includes "a
hand scanner that generates images of a user's palm."
Data that would pass through the terminals, including where
consumers shopped and when, would be stored on Amazon's cloud,
according to some of the people. The company would like to
integrate this data with consumers' Amazon.com spending, those
people said. That could give Amazon more leverage to charge higher
prices to advertisers based on the idea they can better predict
what customers are likely to buy.
The New York Post earlier reported that Amazon was testing a
payments system that would let consumers use their hands to pay at
Amazon's Whole Foods chain.
Amazon has had limited success with another payments project
pitching bricks-and-mortar merchants on accepting its Amazon Pay
digital wallet. One roadblock: Stores didn't want to remind their
customers about Amazon and risk encouraging them to buy there
instead. That could be a challenge with the new terminals as
well.
In the near term, Amazon wants to nudge card issuers and
networks to innovate along with it, according to people familiar
with Amazon's strategy. Some payments companies worry that in the
long term, tech companies including Amazon could just cut them
out.
Card companies have raised concerns about the potential for
fraud with the terminals, including how to catch people who try to
link their hands to a stolen card. Amazon has said it could
blacklist people who use the system fraudulently, some of the
people said. But that might not stop cheaters from making one-time
purchases of electronics or other big-ticket items.
Card issuers are also asking how consumers would be able to add
more than one account to their palms and how they would be able to
choose between those cards when they pay.
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
January 19, 2020 12:13 ET (17:13 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024