Amazon Wallet: A Threat to Bitcoin?

By
Neil Sardesai @@neilsardesai
July 25, 2014
This is what Amazon Wallet looks like.

Amazon isn’t new to the digital payments industry. The online retailer launched Amazon Payments back in 2007, a service that directly competes with the likes of PayPal and Google Wallet. Then in December 2013, Amazon purchased GoPago, a mobile payments platform. Now, continuing the company’s push into the digital payments sector, Amazon has launched Amazon Wallet.

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What Amazon Wallet Does, Or Rather, Doesn’t Do

Amazon Wallet is…surprisingly basic. Designed for use at the point-of-sale, Amazon Wallet is essentially an Android app that stores gift cards and loyalty cards. The app will come preloaded with Fire Phones, and is currently available as a beta app on Google Play and the Amazon Appstore. Apple doesn’t allow beta apps into the App Store, which may explain why Amazon Wallet isn’t yet available for iOS.

Amazon Wallet’s Main Page

Users can import cards with the app or via https://www.amazon.com/wallet. These cards are then available digitally in a variety of formats, such as barcodes, QR codes, and/or images. The app can also be locked with a 4-digit pin.

However, that’s about it as far as functionality goes. Unlike amazon.com/wallet, where users can manage their payment methods, including credit cards, debit cards, and checking accounts, the Amazon Wallet app can only manage rewards cards and gift cards. While the supported vendors list is pretty long, the app doesn’t really seem to offer anything new. Instead, Amazon Wallet feels like an even more limited (and somewhat uglier) version of Apple’s Passbook rather than a true digital wallet.

Passbook supports boarding passes, event tickets, gift cards, membership cards, and more. Amazon Wallet, on the other hand, only supports gift cards and loyalty cards with limited functionality from select vendors. Passbook also has a more polished interface.

Amazon Wallet’s Potential

It seems odd that Amazon would launch what feels like a half-baked product, rather than waiting until the app offered something unique. However, Amazon Wallet has a lot of potential. If there’s one thing Amazon has, it’s a huge market share. The company operates worldwide and has millions and millions of users. In its current state, Amazon Wallet is similar to another service that Bitcoiners know well – Gyft. Gyft allows users to purchase gift cards online and store them in a digital wallet. The service also offers mobile apps for redeeming gift cards on the go. Two months ago, Gyft also launched a cloud-based POS system. With the direction Amazon is headed, Bezos and co. could put Gyft out of business if they play their cards right.

One of the things the sets Gyft apart is that the service accepts Bitcoin. By doing so, Gyft has made it possible to use bitcoins at Amazon, Sears, Target, and many other retailers that don’t take BTC. I’ve personally used Gyft many times to make purchases at Amazon with bitcoins. However, with Amazon Wallet, Amazon could eliminate the Gyft middleman by accepting BTC. Amazon has a huge selection of gift cards available for purchase, is an established player in the digital payments industry, has a lot of marketing power, and is way more successful than companies like Gyft. It seems like the only thing missing from the equation is Amazon accepting BTC. However, Amazon has shunned Bitcoin several times in the past. But as competitors like Overstock, Newegg, TigerDirect, and Gyft see success with Bitcoin, perhaps Amazon will change its tune?

tl;dr – What Amazon should do

Tags: gyft
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