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Amazon Said to Explore Mobile-Payment Service for Handsets

Amazon.com Inc. (AMZN) is considering the introduction of a service that would let consumers pay for goods in brick-and-mortar stores using their mobile phones, according to two people with knowledge of the project.

The company’s Amazon Payments unit is exploring whether to start a service based on so-called near-field-communication technology, said the people, who asked not to be named because the project isn’t public. NFC lets devices transmit data such as payment information, loyalty points and coupons by tapping them against specially equipped cash registers.

Amazon, based in Seattle, aims to parlay its dominance in Internet retailing into mobile commerce. It’s also keeping in step with other technology leaders such as Microsoft Corp., Apple Inc. (AAPL) and Google Inc. (GOOG), which have introduced or are said to be planning software, devices or services with NFC. The value of mobile transactions is expected to surge more than sevenfold by 2014, according to research firm Gartner Inc.

Offering NFC services could pit Amazon against Google, Apple and Isis -- a joint effort between AT&T Inc., T-Mobile USA Inc. and Verizon Wireless -- which are developing their own mobile-wallet services.

Amazon has been pushing to become one of the biggest players in mobile commerce for months. On March 22, Amazon opened the Amazon Appstore for Android, which sells applications for mobile devices based on Google’s Android operating system. Earlier this week, the retailer unveiled a music-streaming service that works on Android smartphones.

Mobile Payments Soar

In 2014, 340 million global mobile users will use mobile payments, with such transactions totaling $245 billion, up from $32 billion last year, according to Gartner.

Amazon is also considering creating NFC-based marketing services, one of the people familiar with Amazon’s project said. For instance, a consumer shopping for jeans who can’t find the right size in a retail store might be able to tap a handset against the item’s NFC tag to locate the correct item for order through Amazon.com.

Amazon already offers an application for Apple’s iPhone, called Price Check by Amazon, that lets consumers compare prices of in-store items with Amazon’s by scanning bar codes, snapping pictures, or saying or typing the product’s name.

The online retailer will decide whether and when to unveil the NFC mobile-payment services in the next three to five months, one of the people said.

NFC Devices

New NFC services are being paired with special NFC-enabled handsets, which are starting to emerge in greater numbers. The number of phones with NFC will double in 2012, from 35 million shipped in 2011, consultant ABI Research estimated.

In December, Samsung Electronics Co. and Google unveiled the Nexus S smartphone with NFC. Apple is said to be working on adding the feature to its iPhone, people familiar with the company’s plans said in January. And Microsoft plans to include mobile-payment capabilities in the next version of its Windows Phone operating system, two people with knowledge of the company’s plans said this week.

Amazon Payments already lets consumers pay for goods and services online using payment methods associated with their Amazon.com accounts, and since 2009 the company has offered a mobile version of the service.

Amazon rose 71 cents to $180.13 at 4 p.m. New York time on the Nasdaq Stock Market. The shares are little changed this year.

To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net; Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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