In Alternative Payment Fight, Amazon Wants To Reverse Google’s Move
Written by Evan SchumanGoogle hasn't been faring especially well, with some seeing Google's move in April to boost prices as desperate. Then on Thursday (April 30), Amazon counterpounched, offering to waive fees for five months for retailers who would be new customers for its Amazon Payments program. The Amazon offer was quite limited, excluding any existing consumers, having the fee waiver only lasts five months (from April 29 through Sept. 30). Technically, it would be five months for those who signed up immediately. The deal isn't for five free months, it's free transactions until Sept. 30, apparently regardless of when a merchant signs up. The deal also has an especially low ceiling, with Amazon saying that the fees will start sooner than Sept. 30 if $2 million or more is sold.
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3 Comments | Read In Alternative Payment Fight, Amazon Wants To Reverse Google’s Move
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May 5th, 2009 at 12:18 am
The 80-20 rule applies here. 80% of transactions on Internet happen on 20% of sites. These sites are very large merchants. They would not be interested in Amazon offer since the ceiling is very low (2 million) for them. Some of them are so huge that they will reach the ceiling within a day. Amazon needs to concentrate on Kindle than a payment system.
May 5th, 2009 at 12:39 am
Editor’s Note: Not necessarily. If a payment service can strongly (or even overwhelmingly) dominate that 20 percent, that’s a huge and very profitable situation.
P.S. Based on the figures we’re seeing, not so certain the 80/20 numbers still hold. There are a ton of small sites out there doing well in their niches.
May 6th, 2009 at 10:10 am
The 80/20 rule is what the book “long tail” was all about. There are so many people, in this case businesses and purchases, in the 80% outside the top that if a company can dominate there they could make more than if they just compete in the top 20%.
The 80/20 rule is slowly becoming less of a factor because of the internet. More people are spreading out more and more which isn’t getting rid of the top sites/companies but it is spreading the sales so the top sites/companies are seeing less while the end of the tail (the bottom %) are seeing more.