Market Overview

Report: Amazon May Offer Physical Stores Kindle-Based Checkout This Year

Report: Amazon May Offer Physical Stores Kindle-Based Checkout This Year

Amazon (NASDAQ: AMZN) may be about to make brick-and-mortar retailers an offer it hopes they don’t refuse. The Wall Street Journal reported this week the online retailer may introduce a Kindle tablet-based checkout system as early as this summer.

One possibility would involve Amazon giving merchants Kindles equipped with credit-card readers and software. The report indicated that the company might also offer services such as website development and data analysis.

Amazon’s acquisition last year of San Francisco startup, GoPago, a smartphone-based checkout system developer, was mentioned as one indication the company was serious about connecting with its competition.

According to The Wall Street Journal report, sources said the project was not certain and could be delayed, altered, or even canceled before it gets off the ground.

Amazon’s interest in getting involved in physical store sales makes sense. As big as e-commerce is, 90 percent of all transactions still happen in a brick-and-mortar setting.

Related: Amazon Denies Rumored Online Live Pay-TV Service

In addition, by creating and offering data and sales management hardware and software, Amazon could be in a position to help itself to a treasure trove of consumer-related spending data.

That fact alone could be major reason physical retailers might resist – even if Amazon offered a sweet deal on its checkout systems.

In addition, there’s plenty of competition in the checkout system space already. Amazon, which has virtually no experience in brick-and-mortar retailing would be going up against the likes of Intuit, VeriFone Systems and NCR, all of which are well-established in physical retail.

In addition, eBay’s PayPal division has been testing ways to become involved in physical retailing, including offering proprietary card swiping devices of its own.

Apple has also been moving into mobile payments using its iPad and iPhone devices, both of which have become popular in some areas of retail.

On the other hand, Amazon has credit-card information for more than 230 million users. It could also offer merchants the option of advertising on its extensive and popular website.

Interestingly, according to Techcrunch, dipping into physical retail payments is not the only thing Amazon has in mind. According to that website, Amazon would also like to enable people to be able to bypass banks and other payment networks entirely with its own peer-to-peer (P2P) payment system to rival PayPal.

Amazon said its proposed P2P solution was all part of a larger strategy to build “products and services which will delight billions of customers as they buy and sell things in the real world.”

At the time of this writing, Jim Probasco had no position in any mentioned securities.


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