Amazon Payments—An Exceptionally Bad Idea For Merchants

by Randy Murray on September 4, 2014

Amazon is an amazing company. I buy from them frequently. I am an investor.

But I’m also very wary of them. And I think that retail merchants should be as well. Amazon is offering to make things easier and less expensive for merchants by handling payments. What a wonderful idea!

Except for the part about Amazon collecting detailed information about what you’re selling and who’s buying.

Square doesn’t sell what you do. Apple, if they get into payments (likely), probably won’t be interested in your merchandise. But Amazon is. It’s not so much that Amazon wants to drive you out of business, it’s just that they want to sell everything that you sell to your specific customers for less than you can. The driving you out of business part is only a side effect.

The deal that Amazon Payments is offering is a very poor one for merchants: we’ll slightly simplify your payments and make it a bit less expensive in exchange for all of your detailed sales information.

If I were a merchant the last thing I would want is for a competitor to supply me with an essential service in exchange for all of the details of my business. Amazon Payments is precisely the type of thing that you want to avoid.

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