By Arjun Kharpal for Cnbc
Amazon‘s payments business is beginning to look for acquisitions as the value of financial technology – or fintech – start-ups “comes back to earth”, a top executive at the e-commerce giant told CNBC on Tuesday.
Global investment in fintech firms hit $20 billion in 2015, a 66 percent increase on 2014, according to KPMG. The interest in the sector has seen a number of start-ups snag high valuations. But amid concerns of an overheated market, recent valuations have been more conservative, something Gauthier is hoping to take advantage of.
Amazon Payments was relaunched in 2013 and the company has a product called ‘Pay with Amazon’ which allows the company’s customers to pay for anything using their account on other websites.
Now the business has racked up 23 million active users, Amazon is ready to start extending its platform through acquisitions.
“We created this business unit a year ago, now I’m starting to look at opportunities outside,” Patrick Gauthier, vice president of Amazon Payments, told CNBC in an interview at the Money 2020 conference in Copenhagen.
“After a number of years where fintech has been a little bit ahead of itself in terms of valuations things have come back to earth.”
Gauthier did not reveal specific targets but said Amazon is on the lookout for companies with “good teams, people who have a focus on customers, and means through which we will be able to extend the number of user cases and number of places where we can roll out Pay with Amazon”.
On Monday, Amazon announced it wasextending its payment offeringto merchant partners – third-party businesses hosting a shop on an e-commerce website. The idea is to help these businesses have a payment solution that can be integrated with their online store.
“I can foresee a time when pretty much every merchant except for the very large ones will be looking for a way to connected to Amazon customers, because they are a proxy for active online shoppers,” Gauthier said, speaking about the ambitions of the payments unit.
Amazon Payments is a direct competitor of PayPal and credit card companies like Visa which has its own online payment solution. The division has been growing quickly with the number of active users globally increasing 150 percent last year to hit 23 million. The number of merchants on board grew 200 percent year-on-year, though Amazon did not give a specific figure. And the average transaction value of people using Pay with Amazon is $84 globally.
Still Amazon Payments is behind rival PayPal which has 179 million active users. But the e-commerce giant said that given its 304 million customer user base, it will be able to convince merchants to use its service.
First appeared in CNBC