Executive Summary

• The US mobile payments market is highly fragmented, and leaders PayPal and Apple Pay have not yet achieved widespread public acceptance. US mobile payment platforms are hamstrung by hardware issues, proprietary systems and closed platforms as well as by a general lack of consumer enthusiasm.
• The US payments market is huge: Americans completed 33.8 billion credit card transactions in 2015, for a total value of $31.6 trillion, and eMarketer forecasts that 48.1 million peer-to-peer mobile payment users will generate total payments of $49.29 billion this year.
• Amazon has quietly expanded its Amazon Pay platform to encompass more than 33 million users and 133 retailers. The platform uses the payment information securely stored in customers’ Amazon.com accounts to fund and bill purchases of goods and services. Other benefits include access to Amazon’s customer service, not having to share one’s credit card information beyond a single vendor and the security of the platform.
• Amazon Pay Places is a mobile version of Amazon Pay that enables users to pay for items through their smartphones using the payment information in their Amazon.com account. The platform is currently undergoing testing at TGI Fridays restaurants in several US cities.
• Amazon wins customers with the convenience and ease of use of its platform, even on occasions when it does not offer the lowest price. The company has more than 310 million active customers who are already comfortable with using Amazon’s payment methods, and the company can likely leverage this customer base to conquer a fragmented US mobile payments market.