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Payments Innovation Continues Outside of Banks

Payments Innovation Continues Outside of BanksA recent article in the ABA Banking Journal by Chris Nelson, founder and CEO of Zoot Enterprises, highlights two major players, outside the traditional banking payments industry, taking another run at the payments business.

Amazon and PayPal have been plotting their strategies on how to continue to build brand awareness and penetrate a greater percentage of payments. Paypal already has an amazing growth curve and its continuing. Did you know that PayPal customers made 846 million transactions in Q4 2013, or more than 9 million payments every day? Pretty amazing numbers, albeit it does have a very large driving in eBay.

PayPal’s unveiling a new solution called Payment Code. It is a continued refinement of mobile wallet payment technology at retail locations. “Payment Code technology works with merchants’ existing infrastructures to allow shoppers to pay more easily with their PayPal accounts at checkout. Customers use apps that generate QR codes that are readable by merchants’ scanning devices. Alternatively, PayPal sends a four-digit code (for one-time use) to the customer that can be entered into card-reading terminals,” says Nelson.

Amazon, with the continual growth on online and mobile transactions, are trying to drive the cost of an online transaction fee to as low as 1.9% and are offering a plethora of ways to accomplish it.  Amazon is now offering Log-in and Pay with Amazon. Partner sites can use a payments button that reads “Pay with Amazon” creating a seamless customer experience and expanding the merchants’ online reach to the reportedly 215 million active Amazon account users. Consumers can go from browsing to buying anywhere as effortlessly as possible. Perhaps most powerful to this solution is the slogan, “Make Amazon’s customers your customers.”

These major players will continue to innovate at high rates of speed. Will they create critical mass and erode bank/credit card market share? They sure hope so…

 

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