In what could set a precedent for Australian online retailers, Amazon is offering customers a new way to pay for their purchases without requiring them to have a debit or credit card.
Instead, the payment system called PayTo establishes a direct connections with bank accounts.
It operates on a network that is independent of Visa and Mastercard which charge merchant fees. Known as the New Payments Platform, it is owned by the banks and operated by Australian Payments Plus, the owners of Eftpos.
Amazon customers selecting the new payment option will be directed to their respective banking apps, where they will be able to set a spending limit safeguard as a layer of security to protect themselves against unauthorised large payments being debited to their bank account.
The PayTo back-end processes have been designed by National Australia Bank and fintech Banked.
Amazon was “following the lead of our customers, [whose] preferences are shifting toward banking apps and instant payment methods, ” the company’s payments director in the Asia-Pacific, Sujit Misra, told the Australian Financial Review.
“This adds a simple, secure and convenient payment solution ensuring our customers have choice and can pay according to their preferences when they check out on Amazon.”
According to RBA data, American Express, Visa and Mastercard receive $1.8 billion every year to process transactions in Australia.
Mastercard and Visa have resisted calls to reveal their charges to merchants and the RBA, stating that this would be anticompetitive.
The Reserve Bank of Australia wants to see more volumes move to PayTo. “It is a big deal that a brand like Amazon is stepping in to PayTo, which still has a long journey to go,” said Banked chief executive Brad Goodall. “Over time, account to account payments will be a significantly more efficient cost model.”
Amazon Raises Ad Spending on X
Amazon is believed to be increasing its ad spending on Elon Musk’s X, after drastically cutting its advertising more than a year ago over concerns around hate speech on the platform.
Amazon Chief Executive Andy Jassy was involved in the decision, reported the Wall Street Journal.
Advertisers began leaving X in large numbers after Musk acquired the platform in 2022, leading to a sharp fall in its revenue.
Last year, X even filed a federal antitrust lawsuit against several big brands including Mars and CVS Health and an advertising trade group accusing them of illegally boycotting the platform.
Apart from Amazon, Apple too which withdrew ad spends on X in late 2023, is believed to interested in now testing ads on the platform.
