Amazon to Square: We've Got Mobile Payments Too

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Aug. 13 (Bloomberg) -- Amazon is making an entrance in the mobile-checkout market, taking on startups such as Square as more local businesses seek to ease the process of accepting credit cards. IDC Chief of Research Crawford Del Prete and Bloomberg’s Sarah Frier speak on “Bloomberg West.” (Source: Bloomberg)

With you.

It seems amazon will not stop at anything to get more customers.

What is your take on this move?

This is just another move of amazon being the disruptor.

They basically started in retail, then move to cloud services.

Now that they are at scale, they are in a very enviable position.

They need this machine that they can drive through different kinds of experiments and disruptive efforts.

The phone that we saw earlier this year, that is about understanding the retail experience.

We will see how successful it is as a product, but they will probably learn a lot.

This is a double whammy.

They will learn a lot and undercut and have none of relevance and move it through the machine and potentially damage some competitors out there.

This is the long play.

This is a long game and this is a disruptive move on their part.

90% of commerce still happens in physical retail stores.

This puts amazon into those stores, potentially.

Square is a seamless user experience, but a full percentage point lower it's kind of hard to beat.

People are asking whether it is too late for amazon to come into this.

You know, if you charge your users less, they will want to use your product.

And i think they are proving there is a market for this instead of creating the market will stop -- creating the market.

The market sounds big, but when they came to square, you are also talking about smaller merchants.

There was a question about how big the market could be.

Crawford, you have some numbers about the potential of this space.

What do you have?

We think the mobile space could be a trillion dollar market by 2023, but that will only represent half of all the payments out there.

But there's a lot of upside.

When you get into small businesses, there is about 26 million of those in the u.s., but the vast majority of those are filed for tax reasons with zero employees.

With only about 7 million that would have employees and would be in the position to take these kind of products.

It is about going after that 7 million, but also about getting a small piece of this fast-growing mobile payments segment.

But again, at 2.5% in 2017, there is a lot of room for growth here.

And paypal is also in this space.

I want to ask you about square.

They been doing a lot of interesting things.

They recently bought a food delivery company called caviar.

They have been on the receiving end some -- the receiving end of some bad press lately.

Are they just throwing stuff at the wall to see what fit -- what sticks?

I think they're looking be on the payment service to see where else they can be useful, and maybe that would make a broader case for their business strategy.

Of course, there were rumors that they would ipo, and then people saying they were not going to ipo.

There are doubts about their future.

The bigger they say they can eventually be, maybe things will look at her for them.

Crawford, amazon, paypal, which is owned by ebay, can the giants really compete?

-- these are giants.

Can square compete?

I think it will be tough for them to compete without some kind of bigger partner or acquisition deal.

Again, they invented the category to some degree and kind of took it to that next level.

I think the scales ride -- scales rise exponentially.

And guess what, when they see you buying something and making a move with the online product, they can now come at you that way.

Square will need a lot of partners to pull those maneuvers off.

The hill gets pretty steep for square from here if amazon is actually able to move this through.

Thank you both.

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