Amazon strikes once again…. Business Insider just revealed that they are developing a new point-of-sale system to attract small businesses - shortly after announcing the deal with Affirm to offer BNPL services-. In this article, we will tell you how this giant is taking on PayPal and moving towards the physical retail world.
Whether it is a new pair of sunglasses you order online, or a jacket you are purchasing in-store, this solution, that's designed for third-party merchants, will process them all. Amazon will even offer technological capabilities to provide intelligent insights on inventory and other business functions. The pressure on Amazon is high as they established themselves as inventory and fulfillment pioneers.
The big players in the point of sale payment system have expanded their offering to small businesses that moved online during the pandemic boost. And given that PayPal is gearing up with services for BNPL and offerings to micro-merchants, we find this news to mark the "CLASH OF THE TITANS”
We are not here to speculate, yet immediately after the news, the share price of Paypal experienced a small dip - so are investors anticipating Amazon's increasing presence in payments as a significant threat to Paypal?
Both Amazon and Paypal are incredibly well established companies, both dominant in their own league. But they are starting to shake up their status and move towards smaller physical merchants - in a fight for market share between the two.
This move actually started last year, when Amazon partnered with Goldman Sachs and ING to provide loans to these smaller physical merchants.If Amazon follows Alibaba’s steps, we suspect it will also provide technology to small business sellers to help to analyse customer data and enable them to better reach the customers and manage the demand.
For a strategic platform such as Amazon, it totally makes sense to us why they are entering the point of sale space and the timing of this couldn’t be more perfect with everything that’s going on in the retail space.
Not to mention that the global POS software market was worth $9.26 billion in 2020, and it's expected to reach $19.56 billion by 2028, registering a Compound Annual Growth Rate of 9.5% over the forecasted period, according to a new report by Grand View Research, Inc.
Global POS software market was worth $9.26 billion in 2020
So what makes this news particularly interesting?
In a nutshell, smaller merchants are always on the lookout for added value when it comes to competing with larger stores. Amazon is a powerhouse when it comes to online technology and warehousing capabilities while Paypal is yet a payment solution for the most part.
Additionally, at a time where physical merchants are jumping on the ecommerce train, a solution that builds a seamless omni-channel experience is a gold mine, and we believe these sellers will be willing to invest into such solutions.
Finally, we strongly believe that this project fits perfectly within Amazon’s strategy, and a huge step towards taking up a large chunk of the POS market. But do you think that Amazon will succeed in taking on its rivals such as Paypal and Shopify?
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