|Thu Jan 26 2017 22:19:12|
Amazon Considers Offering PayPal
By: Ina Steiner
PayPal CEO Dan Schulman told Bloomberg
it has been in conversations with Amazon about letting shoppers pay for Amazon purchases using their PayPal accounts. "We're closing in on 200 million users on our platform right now. At that scale, it's hard for any retailer to think about not accepting PayPal," he said.
UPDATE: Bloomberg has changed its story - it looks like there is nothing new to report, but rather Amazon is one of many companies PayPal has been in talks with, from retailers to mobile carriers to recent deals with Discover, Visa and Mastercard. PayPal provided us with the following statement this evening: "As the digital payments partner of choice for financial institutions, technology companies and retailers of all sizes, we are constantly in discussions to expand the availability of PayPal for our customers worldwide. We have nothing to announce at this time."
Before PayPal's split with eBay in 2015, we raised such a possibility on the EcommerceBytes Blog
, where readers had mixed opinions. A number of readers expressed dissatisfaction with eBay, which at the time was headed by John Donahoe - who is now Chairman of the Board of PayPal.
One reader raised an interesting point - the cost to sellers. "For selling on Amazon, they can't allow PayPal to add to the 15% final value fee. PayPal's cut with Amazon sales would have to be by Amazon from the 15% they take. Only then would Amazon sellers offer PayPal. No way Amazon sellers would pay the 15% plus PayPal's 30 cents + 2.9%."
But if Amazon is indeed considering accepting PayPal, it would most likely follow Etsy's Direct Checkout model where buyers pay the marketplace's PayPal account rather than the seller's PayPal account. In other words, Amazon would accept PayPal the same way it accepts credit cards - it's not the sellers' merchant accounts.
Before eBay acquired it, Amazon offered Bill Me Later (and had invested in the company). Now PayPal owns it, and that could offer Amazon a way to extend credit to shoppers for their purchases - that may be a key reason for Amazon considering PayPal at all.