Payment Methods

How Many Consumers ‘Pay with Amazon?’

It’s time to show a little (payments) leg.

That’s what Patrick Gauthier, Amazon’s VP of payments, thought when the team decided now would be the time to let the cat out of the bag about one of its core businesses that, until now, has remained somewhat of mystery (outside of Amazon).

That big mysteryhow many Amazon customers actually use Pay with Amazon, in how many markets and with how many merchants.

Before we roll out the data, there’s probably one obvious question in your mind: Why now? Well, according to Gauthier, who spoke with MPD CEO Karen Webster in an exclusive interview about the data, he was tired of other’s telling what he described as “Amazon’s story” — “And realizing our story is better.”

So, what does that story look like?

Well, it starts with 23+ million.

That’s the number of customers who have used their Amazon accounts to make a purchase on a third-party merchant website with a Pay with Amazon button. Altogether, those customers span more than 170 countries to use their Amazon account to make a purchase on a third-party site.

Gauthier also officially let Webster know that Amazon now has more than 294 million customers (who all technically have a Pay with Amazon account, since there’s no need for a separate account when paying on a merchant’s site that offers the option).

Interestingly enough, Gauthier notes, more than 50 percent of Pay with Amazon customers who use the option are Prime members. Calling Prime members “crème de la crème” on the Internet for shopping, Gauthier notes that the shorthand for Amazon customers could be “people who shop online.”

Tough to argue against.

He also shared some key figures about Prime members, which could be particularly relevant to merchants who wonder if Amazon should be considered a friend or foe. Prime members tend to be more affluent. A recent comScore study indicated that 60 percent of those 23 million Pay with Amazon customers have a household income of more than $100,000.

Amazon’s latest stats show that the average Pay with Amazon ticket was $84 per ticket in 2015.

But here’s the kicker for merchants.

According to Amazon’s data, merchants using Pay with Amazon grew more than 200 percent YOY. Customers using Pay with Amazon grew more than 150 percent YOY. And Pay with Amazon payment volume grew by more 150 percent YOY. 

Of course, we don’t yet know what volume it was growing from, so Amazon isn’t quite letting all of its chickens out of the barn. But it’s certainly making a case as to why small and medium-sized merchants may want to perk up about those stats. (And an indication of why big retailers may be worried.)

“What we do is help connect [merchants] with an Amazon audience — wherever it is,” Gauthier said. 

But Gauthier also says that Pay with Amazon isn’t about processing payments; it’s about facilitating the transaction that involves an Amazon customer. That’s where Amazon’s brand loyalty comes into play (also known for the Marketplace where consumers start their shopping journey, according to PYMNTS research). 

But that also matters for its third-party merchants, especially when every retailer (big and small) is after customer conversion, retention and reducing friction during the entire shopping experience. And the benefit to Amazon, of course, is that those Pay with Amazon customers who shop on a third-party site also engage more with Amazon’s ecosystem of services. 

“There’s such a degree of familiarity with the experience that by allowing the Amazon customer to take their Amazon account wherever they want to be — to either identify themselves or to complete a transaction — we’re making their life easier. No more ‘one more thing to learn.’ No more ‘one more thing to remember,'” Gauthier said. 

And sure, there’s a concern among some merchants who still think about Pay with Amazon as promoting another merchant option, but what Gauthier said is that its mid-tier market of businesses tend to understand the audience that Amazon has already won over.

“There’s enough data that when we connect with [the merchant], it is actually good for their business,” Gauthier said.

After all, all that third-party merchant wants is the customer and the ability to make that customer convert. Outside of the major merchants (that Pay for Amazon wasn’t designed for), Gauthier insists the “other is is an opportunity.”

“We help these people to make it to leverage both our audience in terms of our commerce identity and payment,” he said. “For merchants, online is no longer a single channel. But it really is a set of channels. That set of channels involves their own sites. But also marketplaces.”

Pay with Amazon launched in the U.S. in the fall of 2013, expanded into the EU in 2014 and then to Japan a year later. Out of the 170 countries where Pay with Amazon is available, the market share is about 50/50 between the U.S. and Europe.

Gauthier also said there are more international expansion plans in the works — likely motivated by that survey mentioned above, which was conducted in conjunction with PYMNTS, that showed that when asked how comfortable consumers were using a new online and mobile payment method, 50 percent of consumers picked Amazon (25 percent above Apple and 81 percent above Google).

While Amazon doesn’t offer up a full list of merchants that use Pay with Amazon, some more well-known ones that do are: AllSaints, CNN Heroes, Gogo, The Red Dress Boutique, Shinola, Authentic Watches and GolfNow.

And it’s those types of merchants that Amazon has planted the seed with — and, in turn, brought them Amazon’s already loyal customer base who have an affinity for shopping online.

A bet, Gauthier and team says, merchants are increasingly making to get the sale.

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