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Amazon's Ambition in Physical Retail May Go Way Beyond Payments

The e-commerce giant envisions building the equivalent of AWS for brick-and-mortar stores.

Asa Mathat
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Online retail giant Amazon is planning to offer a checkout system to retail stores later this year, but the point-of-sale and payments system is only one part of a more ambitious plan by Amazon to sell a comprehensive suite of digital products and tools to small and midsize businesses, two people familiar with the plans told Re/code.

The payments system, which may incorporate the use of a Kindle as a point-of-sale device as well as a credit-card-reading dongle a la Square’s, is expected to be “the core” of the system, one of these people said. But Amazon is seriously considering offering a more comprehensive software suite targeted to small and midsize brick-and-mortar businesses that may include products such as accounting software, website creation tools and inventory management systems, though the list of tools appears to still be in flux. The platform is also expected to contain current Amazon offerings such as Amazon Local daily deals, whose group has been hiring aggressively in recent months, these people said.

The goal is to make this new collection of tools and services as critical to brick-and-mortar shops as its Amazon Web Services offering has become to online businesses.

“What AWS is for developers, this more detailed application layer above AWS will be for businesses,” one of the people said.

These plans may yet change or fall apart. But if launched, it would pit Amazon against traditional point-of-sale providers and payment processors as well as newcomers such as Jack Dorsey’s Square; Apple, which is planning its own entrance into brick-and-mortar payments; and other small business software providers such as Intuit.

Amazon may make these tools available on an a la carte basis and as a bundled deal. In one possible scenario, Amazon would lower the payment processing rate a business pays if it orders a certain amount of inventory through, one of the people said.

Some industry insiders were skeptical that many small businesses would want to hand over their transaction or inventory data to Amazon. But with millions of businesses already selling on Amazon Marketplace, that could indicate significant demand. However, it’s unlikely that large retailers would have any interest in doing business with Amazon.

The platform is expected to be built, at least in part, with the help of technology and engineers who recently joined Amazon from payments startup GoPago as part of an acquisition of sorts.

The Wall Street Journal previously reported Amazon’s plans to introduce a Kindle-powered checkout system in retail stores. Amazon also appears to be working on its own peer-to-peer payments product, according to a job listing pointed out by TechCrunch.

Amazon spokeswoman Julie Law declined to comment.

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