The Biggest Obstacle Facing Amazon Payments

Amazon Payments is a platform that allows Amazon.com (NASDAQ: AMZN) account holders to pay for merchandise from other vendors using the account and payment information from their Amazon accounts. While Amazon executives have remained mum on the subject in this year's conference calls, in a press release earlier this year the behemoth online retailer lifted the curtain a bit and let investors in on some fairly impressive growth numbers related to its payment platform. The most remarkable statistic was that 33 million customers had now used the platform to complete a transaction -- more than 50% of whom were Amazon Prime members. Although the company did not reveal its payment volume numbers, Amazon did say that the payment volume had doubled and merchant coverage had grown 120% in 2016.

It is easy to imagine why this platform would be popular with consumers. For Prime members, there are few things easier in life than shopping on Amazon's website, clicking what you want, and having it appear on your doorstep two days later. To have that convenience extended to other shopping experiences is a no-brainer. But the problem with Amazon Payments was never what the consumer would think of the platform, but the merchants who would be accepting it.

Merchants might never entrust Amazon with their valuable transaction data from customers. Image source: Amazon.com Inc.

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Source: Fool.com