Another day, another Amazon addition to in-store payments. This time it’s Amazon One — a new method of touchless payment at checkout — that’s stepping into the spotlight.
According to the eCommerce giant, the new technology will allow consumers to pay via a palm-print scan that verifies their identity and pushes their payment using whatever card they have stored. The technology will make its debut at two Amazon Go locations in the company’s hometown of Seattle, according to published reports. But the system will get out on the road soon thereafter, with expansions across Seattle, New York, Chicago and San Francisco already planned.
However, what’s really turned heads is that the technology isn’t intended for Amazon stores alone. If it succeeds at various Go locations, Amazon plans to license it to other retailers, as well as to performance venues and the nation’s offices.
Dilip Kumar, Amazon’s vice president of physical retail, wrote on the company’s blog that the new system had been in the planning stages long before COVID-19, though the pandemic has made it particularly relevant.
“Amazon One is a fast, convenient, contactless way for people to use their palm to make everyday activities like paying at a store, presenting a loyalty card, entering a location like a stadium, or badging into work more effortless,” he wrote. “The service is designed to be highly secure and uses custom-built algorithms and hardware to create a person’s unique palm signature.”
Kumar added that the benefits for retailers are straightforward — less friction at checkout, shorter lines and thereby happier customers.
Meanwhile, Amazon’s plan to license the technology to others (including competitors) isn’t unprecedented. Earlier this year, Amazon began selling its “Just Walk Out” technology — the suite of cameras, sensors and computer-vision software that powers Amazon Go stores — to other retailers.
Combined with the new palm-technology, Amazon — which already controls the bulk of the U.S. eCommerce market — looks like it’s pushing to become entrenched in the world of brick-and-mortar retail as well, in its own stores and everyone else’s.
Convincing Merchants
Of course, the question is how excited everyone else in physical retail will be to let Amazon in. Just because Amazon is willing to sell technology to competitors doesn’t mean rival retailers will be keen to bring the company’s tech into their checkout processes.
It’s not impossible to believe they will, as many of Amazon’s eCommerce competitors are Amazon Web Services clients. But the Amazon One offering is much more closely tied to the transactional part of competitors’ relationships with their customers.
According to reports, Amazon won’t have access to Amazon One data on what consumers purchase or how much they spend via third-party users. However, Amazon will collect some data on where Amazon One customers are shopping.
An Amazon spokesperson told Recode that the company has “no plans to use transaction information from third-party locations for Amazon advertising or other purposes.” Amazon users are in fact free to sign on for Amazon One services without having to link an Amazon account to it if they choose.
But for many merchants, any information about consumers coming into their stores going to Amazon is too much information. However, for others — particularly small and medium-sized firms — consumer enthusiasm for the payment method could be highly persuasive.
Bringing Consumers On Board
There are many reasons to suspect that even if Amazon One wasn’t planned with COVID-19 in mind, it will still have an opportunity to surf some of the tailwinds that the pandemic is providing.
Consumer enthusiasm for contactless payment is at an all-time high, something demonstrated in PYMNTS most recent consumer survey, done in partnership with PayPal. Fifty-seven percent of consumers reported that whether a merchant offers digital payments is critical to their choice of where to shop. And 26 percent reported that a retailer must offer in-store contactless payments for them to even consider shopping there.
Moreover, the survey demonstrated that offering contactless and other digital-payment options not only build consumer comfort, but are also critical to building customer loyalty.
Amazon One is certainly a contactless option that stands out in terms of convenience, as it requires users to literally have nothing other than their own hands to access it. There’s no card to pull out of a purse, no mobile phone to fumble a passcode into because your face is behind a mask and no figuring out how to scan and pay via QR code. If customers can hold a hand still for a second, they’re able to pay.
But all of that ease is built on the power of biometrics, and it remains to be seen if consumers are willing to “hand” over such information to Amazon just to check out faster. However, Amazon maintains that consumers can feel safe because their data will be expertly protected, and because they can choose to have the information deleted at any time.
Further, Amazon points out that it’s not easy for a bad actor to identify a person by simply viewing an image of their hand if that material ever leaks. The company said that’s why it chose palm-scanning over other biometric options.
Will it be enough to hook customers who’ve already had a challenging year? Will pay-by-hand be the touchless solution they’ve been looking for without knowing it?
That remains to be seen. Also to be determined is perhaps the more interesting question — if consumers do end up wanting to pay by hand, how many retailers will be willing to play ball with Amazon to get that technology to them?