7 of Amazon's failed payments predictions

May 10, 2019 11:41 AM

Amazon is undeniably a juggernaut in the realm of e-commerce and digital payments — but its journey was filled with missteps and failed experiments.

Even growing models like the cashierless Amazon Go retail store required some course correction; others failed outright, and a few live on in limbo.

This item is compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun and Michael Moeser. Click the links in each item to read more.

Fully cashless retail

An turnstile entrance to the Amazon Go store is seen in Seattle, Washington, U.S., on Wednesday, Jan. 17, 2018. After more than a year of testing with an employee-only focus group, Amazon Go opens to the public Monday in downtown Seattle, putting to the test the online retailer's technology that lets shoppers grab what they want and leave without paying a cashier. Photographer: Mike Kane/Bloomberg

Mike Kane/Bloomberg

Amazon Go was seen as a revolutionary retail model, designed from the ground up to allow people to enter and exit without brandishing cash or a card. Once users scan in at a turnstile, they are free to roam the store, pick up items, and walk out with them — the payment is charged to the card linked to their account.

But it faced pressure from lawmakers who recently cracked down on stores that eschew cash, forcing Amazon to alter its business model to accept cash at its newest Amazon Go convenience stores and bookstores, including one that just opened in New York.

Cash-paying customers get scanned in by a store employee, and then wave down an employee to pay when they're done. This model is somewhat reminiscent of an Apple store, where individual employees help shoppers check out.

Push-button payments

Wolfe, Daniel

Amazon is focusing more on the virtual and voice-powered reordering on its sites and apps, and as a result stopped producing new plastic Dash buttons in March 2019.

Amazon Dash was a relatively early internet of things concept (early enough to be confused for an April Fool's story at launch four years ago). The Dash buttons are small plastic WiFi buttons that can be placed anywhere to reorder kitchen supplies, laundry soap and more.

The buttons were a hit among brands, as each one was tied to a specific brand's product line, and Amazon quickly added new products to the Dash catalog. However, Dash eventually became more of a placeholder for more advanced in-home shopping technology.

Amazon's answer to Square

Amazon made a dramatic entry into the mobile point of sale market in 2014, with a Square-like mobile card reader called Amazon Local Register, charging early adopters just 1.75% per swipe until the end of 2015.

Even after that promotional period, Amazon's rate of 2.5% per swipe still came in lower than Square's 2.75% for swiped card payments. But price wasn't everything — early adopters found Amazon's offering to be unpolished, and Amazon didn't even make it through its promotional pricing period before exiting the mPOS business in late 2015. It stopped selling new devices in October of that year, and shuttered the service completely on Feb. 1, 2016.

Based on early merchant feedback, Local Register had an average review score of two out of five stars on its product page within a week of its launch.

"I always go with the company that gives me the best deal," Amazon customer frannie2 wrote in a one-star review. "However, I want the DEAL to work as it is stated."

Amazon Coin

Amazon Coin never actually failed, but it suffered greatly from its ecosystem vanishing from underneath it.

Launched in May of 2013, Amazon Coins were a virtual currency to be used on Kindle Fire tablets for purchases of apps and in-app content. The timing seemed odd at first — Facebook had already tried something similar with Facebook Credits, but began phasing them out a year earlier.

Amazon Coins made a bit more sense following the 2014 launch of Amazon's Fire Phone, which was built from the ground up to aid with shopping. Early adopters were offered 1,000 Amazon Coins and a year of Amazon Prime. But Amazon stopped selling the phone a year later, removing one of the key platforms for its digital currency.

A wallet that can't make payments

The Amazon.com Inc. application icon is displayed on an Apple Inc. iPhone in Washington, D.C., U.S., on Monday, Dec. 5, 2016. Amazon.com unveiled a new security tool for cloud customers last week, part of a slew of product announcements designed to fend off competition from Microsoft Corp., Alphabet Inc.'s Google and others in the fast-growing cloud computing market. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Amazon Wallet was an odd product: a mobile wallet that can't make payments. Launched in 2014, the wallet app functioned as a container for digital payment cards and other apps on Amazon's FireOS and Google's Android devices.

It did team with BlackHawk Network to power the features around gift card management, so there was a groundwork for something bigger.

Indeed, Amazon could have chosen to follow the path of Apple's Wallet app (at the time called Passbook) and use it as a launching point for other payment services like Apple Pay and Apple Card.

P2P on the Web

The Amazon.com Inc. logo is displayed on an Apple Inc. laptop computer in this arranged photograph taken in the Brooklyn borough of New York, U.S., on Monday, April 23, 2019. Amazon.com Inc. is scheduled to release earnings figures on April 25. Photographer: Gabby Jones/Bloomberg

Gabby Jones/Bloomberg

Amazon once offered P2P payments in the form of WebPay, a service it shut down in October 2014.

On its site, the company said it's shutting down the service because "we are not addressing a customer pain point particularly better than anyone else. We've learned a great deal about how and when customers want to send money and will look for ways to use these lessons in the future."

Twitter payments

The Twitter Inc. logo is displayed on an Apple Inc. iPhone in this arranged photograph taken in New Hyde Park, New York, U.S., on Sunday, April 21, 2019. Twitter Inc. is scheduled to release earnings figures on April 23. Photographer: Gabby Jones/Bloomberg

Gabby Jones/Bloomberg

Once upon a time, many companies saw Twitter as the gateway to online and mobile commerce. Amazon was no exception, as evidenced by its 2014 launch of the #AmazonCart hashtag.

Amazon shoppers who enabled the feature from their Amazon.com accounts could add items to a shopping cart by replying with the #AmazonCart hashtag when they saw a tweet with links to an Amazon product page.

The service did not let shoppers complete a purchase on Twitter. The user still had to visit Amazon''s website or mobile app to select a payment method, shipping address and other details.

It's unclear what happened to the service. People still tweet links with the #AmazonCart hashtag, but the service's description page is largely empty.