AMZN Stock: This Could Be Big for, Inc.

AMZN, Inc. (NASDAQ:AMZN) is entering the next-generation payments war. The way Amazon wants to make you pay is something you probably already do on a regular basis, and the e-commerce giant is betting it will incentivize customers to shop on its website more, leading to big things for AMZN stock.

One way to win customers is through convenience. In the last couple of years, tech companies have been trying to one-up each other in trying to make the way we pay for things as easy as possible. Alphabet Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Samsung Electronics Co Ltd have allowed us to pay for our purchases with the tap of our phone.

Google just started testing its “Hand Free” payments system in the South Bay area of San Francisco. Users can download the Hands Free “Android” or “iOS” app and add their name, initials, a picture of themselves, and a payment method. Once the app is installed and an account is created, the Hands Free app uses Bluetooth, Wi-Fi, and location services to detect if you are in a participating store. When you get to the cash register, all you have to say is “I’ll pay with Google.” The cashier will ask for your initial and use the picture you provided on your Hands Free profile to confirm your identity.

Meanwhile, Visa Inc (NYSE:V) wants to turn your car into a credit card. The credit payments company is piloting a project where you can pay for gas while sitting in your vehicle using the car’s Internet connection.


Now, if you use Instagram, Amazon’s idea for the way you pay shouldn’t be a problem for you. The company just filed a patent application for a process that would allow shoppers to make a purchase by taking a selfie, rather than typing in their password.

The patent uses image authentication technology to identify the user with some motion thrown in, like a smile or wink, to verify that the shopper is who they say they are and not some mannequin or picture that could be used to fool the system.

With this payment process, Amazon wants to make it safer for shoppers to buy online by relying on a picture of themselves instead of a password that can be difficult to remember, especially if they have different passwords for other web sites. A password is also a potential security threat, as they can be easy for a hacker to steal.

“In order to avoid typing in long passwords in such situations, users often have their passwords stored on their devices or enable information to be stored elsewhere such that an activity can be performed without manually re-entering the password,” Amazon’s submission to the U.S. Patent and Trademark Office reads. “When using such an approach, however, another person having access to that device can impersonate the user for any task associated with the stored password.” (Source: “Amazon files patent for paying by selfie,” Yahoo! Tech, March 15, 2016.)

Amazon is hoping that its payment by selfie process will help alleviate customer fears about shopping online. Although more people are shopping online than ever before, many consumers are still choosing to forgo online shopping because of its potential security threats.

Given that Amazon is the world’s largest online retailer, the company is potentially losing out on sales from customers who are too scared to shop online.

According to a MasterCard survey, 50% of consumers who choose not to shop online do so because of security concerns. Forty-nine percent said they are not comfortable with sharing payment information online or via mobile, and 33% said they find it a nuisance to enter payment information repeatedly on every web site. (Source: “MasterCard Survey: What Holds Customers Back From Online Shopping?”, September 30, 2015.)

Shopping on a mobile device is gaining increased market share, but with these devices’ smaller screens compared to their desktop counterpart, the checkout process can be quite the hassle, causing some customers to give up on a purchase.

According to a report, mobile commerce will make up about 45% of total e-commerce by 2020—about $284 billion in sales. (Source: “Where mobile commerce is going in 2016,”, January 5, 2016.)

It’s easy to see now why Amazon is trying to patent its selfie payments process, as it would significantly optimize the checkout process, especially on smaller mobile devices. Say goodbye to hitting the wrong keys in those pesky form fields.

The Bottom Line on AMZN Stock

Amazon’s selfie payments process has the potential to capture lost traffic from users who feel that the traditional checkout process is unsafe and a hassle. If Amazon’s patent is approved, investors may want to take a look at AMZN stock.