According to industry rumors, online retail giant Amazon may soon enter the mobile payments industry with a highly secure system that will likely limit the amount of data exchanged when two parties engage in a transaction.
Analysts say that Amazon could become a competitor for payment intermediaries like PayPal. Given that its online marketplace already competes with PayPal owner eBay, and that it already has millions of user accounts with active credit cards on file, it’s not too much of a stretch for the company away from its core business.
Amazon has been experimenting with a number of approaches to mobile payments, last year working on a solution that would compete with Square, a mobile POS company offering a portable magstripe reader. Anonymized payments based on SMS or email codes are yet another way of taking on the same challenge. But at the end of the day, it is all really an indication that Amazon is at least investing research and development dollars into the idea.
The e-commerce giant’s new m-payment system is expected to be highly secure, enabling users to pay for products and services without the vendor ever gaining access to sensitive buyer information. While most of the mobile payments industry up until this point has been focused mainly on user convenience, Amazon’s move may finally shift the discussion to an equally important issue, which is security.
“If we look at the different security solutions that are in use by mobile payment system operators internationally, their efficiency is not on the same level,” says Cellum founder and Director of Strategy Balázs Inotay. As he explained, there are different philosophies in terms of what mobile payments ought to be. One of Cellum’s primary focuses has always been absolute security, and is happy to see other companies embrace the issue.