PayPal Payments Could Eventually Land on Amazon

By Don Resigner for Payments Source

A major new feature could be coming to your Amazon checkout process.

Amazon (AMZN, -0.42%) and PayPal (PYPL, -3.18%) have been in discussions about the possibility of the online retail giant supporting PayPal payments at checkout, PayPal CEO Dan Schulman told Bloomberg in an interview on Thursday. While Schulman didn’t say when—or even if—a deal might happen between the companies, he did tell Bloomberg that the companies are trying to determine how they can “use one another’s assets to the mutual benefit” of their customers.

Amazon offers a wide range of ways for customers to pay for its products, including credit and debit cards, gift cards, and Amazon.com store cards. Customers can even link their checking accounts to the site to make quick purchases. But PayPal, one of the more prominent and popular online payment options, has never found its way to the e-commerce site. And its absence has proven conspicuous in an online e-commerce market that, aside from Amazon, relies heavily upon the company’s payment platform.

PayPal broke away from eBay in 2015 to focus its efforts on growing its business in the digital currency market without being tied down to online auctions. Schulman, who took on the chief executive role at that time, has grown PayPal’s presence by making the payments service more ubiquitous on the Internet. The move has helped PayPal grow to 197 million active users at the end of 2016. According to the company’s data, each of those accounts averaged 31 transactions in the preceding 12 months.

While Amazon hasn’t commented on exactly why PayPal hasn’t been offered through its payment services, it might be due in part to the competition between the companies.

Amazon has its own PayPal alternative called Amazon Payments. And like PayPal, Payments can be used by merchants to facilitate payments, and by customers to make those payments. Amazon collects a fee on transactions, similar to PayPal’s business model.

Still, Amazon Payments currently can’t match PayPal’s scale. And in many cases, the merchants that use Amazon Payments to facilitate purchases also offer customers PayPal.

Schulman seemed to make that point in his interview with Bloomberg, saying that any retailer, including Amazon, might find it “hard” to not accept PayPal when it has nearly 200 million users.

Neither Amazon nor PayPal immediately responded to a Fortunerequest for comment on a possible deal between the companies.

First appeared at Payments Source