If Amazon’s terminal succeeds, they can surpass mobile wallets such as Apple Pay while expanding Amazon’s wider access to consumer data.
Editor’s note: This article comes from Tencent Technology .
January 19, according to foreign media reports, according to informed sources, retail giant Amazon is developing a checkout terminal that can be used in physical stores, allowing shoppers to associate credit card information with their palms. After that, they can pay for shopping with the palm of their hands instead of having to swipe their cards or pay with their mobile phones.
According to several people familiar with the matter, Amazon plans to introduce this terminal technology to coffee shops, fast food restaurants and other businesses with a large number of repeat customers. Amazon declined to comment.
Amazon, like other tech companies, is trying to further integrate into the financial lives of consumers, putting banks and credit card networks in high tension. Apple introduced credit cards last year, and Google is also rolling out checking accounts. If Amazon’s terminal succeeds, they can surpass mobile wallets such as Apple Pay while expanding Amazon’s wider access to consumer data.
Amazon’s projects are being closely watched by technology and financial companies, which are increasingly conflicting in terms of payments. Amazon has always experimented with new payment technologies in its unmanned convenience store, Amazon Go. Customers can pick up the goods they want to buy and leave without having to stop and pay.
At the same time, Amazon has been building Amazon Pay, a digital wallet that consumers can use to make payments at online merchants that are not Amazon. Some media previously reported that Amazon CEO Jeff Bezos emphasized the importance of financial services and paying certain executives.
According to people familiar with the matter, Amazon’s plan is still in its early stages, but the company recently started working with Visa to test transactions on the terminal. In addition, Amazon is in similar negotiations with Mastercard.
Amazon has discussed the project with the card issuer. According to people familiar with the matter, JPMorgan Chase & Co., Wells Fargolls Fargo & Co. and Synchrony Financial have indicated interest in enabling consumers’ credit card accounts to use these terminals.
Credit card companies are trying to figure out whether tech giants such as Amazon intend to become partners or competitors, although some companies believe that participating in the payment ambitions of large tech companies is safer than risking exclusion. For Amazon, it wants credit card companies to play a professional role in protecting consumer credit card accounts.
Nevertheless, Amazon will still have to alleviate concerns from card issuers and the network, including how the terminal will detect fraud. The company must also win support from customers who are wary of providing more personal information, and ease regulators’ growing scepticism about large technologies.
A person familiar with the matter said that Amazon’s vision is that customers will first use a terminal to link their debit or credit card information to their hands. The company is weighing several options to achieve this. For example, a customer can insert a card into a terminal and then have the terminal scan their hands. After that, they just need to put their hands on the terminal and they can pay at participating merchants.
Amazon has recently filed a patent application for what it calls a “contactless biometric system” that includes “a hand scanner that generates an image of a user’s palm.”
According to a person familiar with the matter, data from the terminal, including where and when consumers shop, will be stored in Amazon’s cloud. The people familiar with the matter said the company wanted to combine that data with consumer spending on Amazon. This could give Amazon a bigger bargain and charge advertisers higher prices by better predicting what customers might buy.
Previous media reports said that Amazon is testing a payment system that allows consumers to pay by hand at Amazon’s Whole Foods chain.
Amazon has had limited success with another payment project that promotes acceptance of its Amazon Pay digital wallet to physical merchants. One obstacle is that stores don’t want to alert their customers to Amazon, but encourage them to buy there. This can also be a challenge for new terminals.
According to people familiar with Amazon’s strategy, in the near future, Amazon hopes to promote card issuers and the network to innovate with it. But some payment companies worry that in the long run, tech companies, including Amazon, may eventually exclude them.
Credit card companies are concerned about possible fraud at the terminal, including how to find people trying to link their hands to stolen credit cards. People familiar with the matter said that Amazon had said the company could blacklist people who fraudulently used the system. But this may not prevent scammers from buying electronics or other high-priced goods at one time.
The card issuer is also asking,How consumers can add multiple accounts on their palms and how they choose between these cards when paying. (Tencent Technology Review / Golden Deer)