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While the company has never released how many Prime members it has, recent outside estimates peg it close to 90 million. That being said, if any retailer has the network effect necessary to launch such a platform, it's undoubtedly Amazon. Both PayPal's core service and Venmo are truly agnostic in that they can be used from any device and do not require users to belong to any specific bank or shop at a particular retailer. Up to now, that has given PayPal an advantage in this space. While most big banks participate in Zelle, there are still plenty of smaller community banks and credit unions that do not belong to Zelle's network. For instance, only iPhone owners can use Apple Pay.
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The limiting factor to most P2P services is that each network is limited to a certain medium. Is that enough of a network to make a new P2P platform operated by Amazon worthwhile? It's hard to know. consumers have a smart speaker and about 17% have used their voice, whether via Alexa, Siri, Google Assistant, or another voice-activated platform, to make a purchase, according to one Mastercard study. The smart-speaker device category is certainly growing. Not coincidentally, Echo owners spend significantly more (link opens PDF) than non-Echo owners on Amazon. The more users interact with Alexa, the more they'll probably use it for other things - namely, making purchases from Amazon. With Zelle, banks don't want their account holders to leave their ecosystems to handle financial transactions.įor Amazon, the goal is undoubtedly the same. The more comfortable iPhone owners become using iMessage for P2P payments, the less likely it is they'll buy another brand's phone when it's time to upgrade.
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In the company's fourth quarter, transactions per active account increased to 33.6 over the trailing 12 months, an 8% increase year over year. For PayPal, P2P is a means to get users to interact with and use their PayPal accounts more, and thus far, it seems to be working. However, the goal with P2P payments isn't to make money but to increase user engagement with the larger platform. One might wonder why so many companies are pursuing a field with little to no profit. Apple Pay Cash debuted late last year allowing iPhone owners to exchange funds using iMessage. Big banks collaborated to launch Zelle, a digital P2P platform that's embedded into most big banks' mobile apps and online sites. Last year, however, several new P2P players emerged, making for a crowded field. Why P2P is the place to beīefore 2017, PayPal ( PYPL -1.97% ) dominated the P2P arena with its core platform along with Venmo, its subsidiary P2P app that's popular with millennials. My base assumption and faith is that they're working on some form of voice authentication that we will be able to hook into, with or without the use of a third party vendor. In early 2017, however, Amazon began testing a P2P platform in India.Īmazon, Google, and Apple don't want to create friction, the entire being of those companies is ease of use. As the company explained on its site at the time, "We are not addressing a customer pain point particularly better than anyone else." Amazon eventually shut the service down after it failed to gain traction. Years ago, Amazon operated WebPay, a service that allowed Amazon Payments members to send and request money by entering the amount and a contact's email address on a web page. If the information leaked to The Wall Street Journal is accurate, it wouldn't be Amazon's first foray into P2P payments. While details are far from set on how such a service might operate, one idea being floated is to enable Alexa, Amazon's voice-based smart-home companion, to make payments to friends and family members. Just weeks after news leaked that Amazon ( AMZN 0.69% ) might be interested in launching a checking account-like product, The Wall Street Journal is reporting that the company might also be looking into debuting a new peer-to-peer (P2P) payment platform.