With Installments Push, Amazon Opens Up New Avenues to Cement Merchant Loyalty

For Amazon, in its ever-continuing bid to draw merchant loyalty and widen the use of Amazon Pay, installment payments are now the latest arrow in the quiver.

And by making installments usable anywhere that Amazon Pay is accepted, the broadening of the ecosystem is a shot across the bow at other evolving commerce ecosystems such as PayPal’s.

As reported this week, Prime Visa and Amazon Visa can now split their payments for purchases of at least $50 into monthly installments ranging from six months to 12 months when Amazon Pay is used at checkout.

That payments optionality, PYMNTS noted, has Prime members squarely in sight. The combination of Amazon Pay, Buy with Prime and, now, installments, may spur merchants to have all of those features at the ready in order to improve their own top line momentum.

During commentary on its most recent earnings call earlier this month, Amazon said that merchants using Amazon’s Buy with Prime are seeing their shopper conversion increase by 25%. We’ve noted, too, in past coverage, that third party seller service have been a key bright spot for eCommerce giant, as sales tied to its third-party sellers segment soared by 18.1% to $32.3 billion during the second quarter.

By expanding Buy with Prime — and now enabling installments to cardholders — to a wide ecosystem that is both on- and off-platform, more conversions at checkout mean that Amazon’s fulfillment and last-mile efforts will gain traction too.

Growing Preference for Paying Over Time

The battle for the seller ecosystem is one where Amazon has a strong presence with consumers – and where 61% of individuals have Prime memberships, per PYMNTS research.

Elsewhere, we’ve found that 60% of consumers consider preferred payment methods a key consideration for where, and with whom, they shop. Installment payments are gaining wide embrace, and 40% of consumers who have used installments would abandon their shopping carts if that method’s not offered at checkout. The logic follows, then, for the merchants to embed the option in their own shoppers’ journeys.

Other platforms, PayPal among them, have been looking to broaden their ecosystems.

PayPal’s latest results show that 35 million merchants are serving 431 million active consumer accounts (up 0.4% year on year in the latest quarter) with increasing frequency. Management said on the PayPal call that the firm is seeing, per CEO Dan Schulman’s remarks, “25% to 30% increase in first-time users of Buy Now, Pay Later, and those are using it 5% to 10% more in terms of the overall TPV than those who didn’t have the pre-approved amounts.”