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Amazon-Stripe partnership
- xfour 4y agoWait, obviously Amazon has their own checkout software. Is this a name recognition play to have AWS come with Stripe batteries included?
- agloeregrets 4y agoMy guess is that Stripe is way better at international payments and by moving US to stripe they can have a single payment processor worldwide.
- julianlam 4y agoThey do, but Stripe may have other advantages that Amazon's home-grown billing does not... fraud detection comes to mind.
- Hermitian909 4y agoStripe's superior fraud detection is an open secret in FinTech. There are apparently a lot of large companies with their own payment rails that route riskier looking payments (e.g. a new account who you haven't yet settled a transaction with) through Stripe for this reason.
- habitue 4y agowhich probably makes stripe's job even harder, because now there's adverse selection
- BurningFrog 4y agoYou can charge extra per detected fraud.
- mschuster91 4y agoIf there is one company besides Stripe that I'd expect to have high quality fraud detection, I'd name Amazon actually, maybe add PayPal. The largest online retailer in all major markets sans China and Russia by far, you don't get to that position if you're lacking in the anti-fraud department. (Alternatively, one might say Amazon simply is large enough to eat up the cost of fraud...)
- ceejayoz 4y agoIf Amazon has good fraud detection, they should consider using it on sellers.
- twentyarms 4y agozing!
- fomine3 4y agoSpot on
- __derek__ 4y agoIt seems like payments is traveling the inverse of the shipping/delivery route: first build in-house, then add on other fulfillment partners that are able to handle certain payments better.
- marban 4y ago~2025: Stripe becomes Amazon SBS — Simple Billing Service
- napolux 4y agoAnd the logo will be a blue square with the $ sign in it, rotated 45 degrees
- joshstrange 4y agoI... I... I don't hate this idea... I'm all-in on AWS and I've drank the kool-aid so I'm obviously biased but I've quite enjoyed living in the AWS walled garden. Stripe is one of 1-2 external services I use, bringing that "in house" would be nice, especially if CDK had full support for creating merchants/etc.
- mritchie712 4y agoWhat do you think would improve by Stripe being in AWS? As a Stripe customer, I like the way Portal[0] allows me to outsource payments (almost) entirely. I don't see the advantage (relative to the cost) of building it into my product. 0 - https://stripe.com/blog/billing-customer-portal https://stripe.com/blog/billing-customer-portal
- napolux 4y agoGood. Guess why PayPal after leaving eBay wasn't moving on Amazon. Maybe they were doing enough money already :)
- l8again 4y agoAmazon has its own Uber, own fulfillment service down to monitoring tools that are built in house. So, not sure if it's a change in their "buy vs build" strategy or there's a more business play here to gain traction in the global markets?
- karmasimida 4y agoIt is a deal to keep Stripe lock on AWS. Same with Slack, where Amazon agrees to adopt Slack internally in exchange for Slack to use AWS for video conferencing. You got to give something in return. In this case I think both parties have something that the other side wants so why not?
- kotaKat 4y agoHell, Amazon bought a fairly not insignificant stake in a random no-name Korean handhelds company (Point Mobile). Their devices have been rolling out in FCs to replace Zebra handhelds left and right. Though... that was also because their main handheld vendor (Zebra) bought their own warehouse robotics company, so a bit of a signal to Zebra that they don't play well when their partners become competitors. https://renovotec.com/press/amazon-2nd-largest-shareholder-point-mobile https://renovotec.com/press/amazon-2nd-largest-shareholder-p... https://www.communicationstoday.co.in/koreas-point-mobile-expands-supply-deal-with-amazon-to-offline-units/ https://www.communicationstoday.co.in/koreas-point-mobile-ex...
- elforce002 4y agoUber? Which division is that? Are you referring to Amazon fresh?
- deleted 4y ago[deleted]
- aabhay 4y agoIn enterprise, it’s often the case that your biggest customer effectively owns you. They get to dictate roadmaps, you’re forced to spin up a special team just for them, and it becomes harder to justify your investment into long tail customers because this big golden monkey is on your back.
- ketzo 4y agoI worked briefly at FedEx corporate, and they made a big deal about their policy that a customer could never account for more than 30% of total volume. Leadership often made it clear that Amazon was right at that limit, and wanted to send a lot more volume, but FedEx wouldn't let them, in order to maintain "independence." To your point: it didn’t stop them from working to cater to Amazon’s every whim, and it did provide Amazon the incentive to build a (better and more cost-effective) fulfillment and shipping network themselves. I don’t know what the “right” play was, and obviously the story is far from over. But FedEx always seemed to me like they chose the worst of both worlds.
- mritchie712 4y agoWhat % of FedEx revenue was from Amazon? Would have guessed it'd be much less than 30%.
- ketzo 4y agoI wasn't high-up enough to have that kind of number, sadly :D It's an interesting question, though -- I'm sure Amazon had a very favorable contract, so to your point, probably less than 30%.
- scottyah 4y agoIn 2018 (latest I could find with a quick search), it was 1.3%. FedEx said that no customer is more than 3% of their revenues.
- ketzo 4y agoWow, that's a lot lower than I would have thought. I wonder if my memory is wrong? The "30% of volume" stat stands out in my head, though.
- lnxg33k1 4y agoI wish everyone would switch to Stripe, I hate to be forced to keep an account on PayPal in order to deal with some partners because PayPal can't just get a credit card and let me pay without trying to be a social network, when some partner send me stripe, it's so easy and straightforward without any fuss
- Etheryte 4y agoAs a user, Stripe is super convenient. As a provider, Stripe is often a nightmare with no explanation provided terminations, nonexistent support and roboemails.
- d4rken 4y agoEeriely similar to how Google treats Android developers...
- lnxg33k1 4y agoWell, as a user I will get as much as convenience I can get ^^ But yeah I understand that today is a bit of the culture of tech companies to be unreliable, was just thinking about it today, I had few updates on iPhone apps, and all the apps didn't have any explanation, just trying to be funny about having fixed bugs, but no details, software engineering is a bit of a joke nowadays, and I think it's not just software engineering but it's just that companies are a joke, no explanation to customers, not explanation to users, no support etc.
- joshmn 4y agoMy primary email address is somehow flagged globally on Stripe, so I have to use an alternative to get any payment to go through regardless of what card I use: whatever@domain.com causes the payment to fail, but whatever+1@domain.com works. It's sad but hilarious but sad.
- lnxg33k1 4y agoI guess you booked it with a guest at the start
- captn3m0 4y agoInteresting how India is not in the list of countries where Amazon is relying on Stripe. Amazon is doing its own fintech play here, with heavy investments into Amazon Pay, Amazon Credit cards, and more. None of that seems to be driven via Stripe, but other local partners and banks instead.
- sidcool 4y agoPayments infrastructure in India is years ahead of those in the US or Europe. Amazon uses it's own Amazon Pay here in India.
- bjacobt 4y agoCan you share some examples of what makes payments in India ahead of US or Europe?
- sofixa 4y agoIndia's UPI allows for free instant transfers with email/phone number, regardless of amount. Business have started using it for payments, that's how good it is. In the Eurozone there's SEPA Instant which is close but requires a bank account number. In the US... checks in the mail? Or third party middlemen for the fun of it.
- chimeracoder 4y ago> In the Eurozone there's SEPA Instant which is close but requires a bank account number. In the US... checks in the mail? Or third party middlemen for the fun of it. SEPA's equivalent in the US is ACH, and in recent years ACH (which is a much older system) has mostly closed the gap with SEPA. Also, SEPA Instant exists, but not all banks are guaranteed to support it - as of even just a few months ago, many popular banks don't support it, which means that using SEPA reduces to ACH (in terms of payout settlement and information flow at POS). Europe also has additional country-specific methods, so you can lean on (e.g.) iDEAL or or BACS if you know you're primarily dealing with Dutch or British customers, but that's not going to help you if you need seamless use across Europe. ACH just never took off culturally in the US as a popular payment scheme - in part because of the easy availability of credit cards, which are usually free to the consumer and provide additional protections (such as chargebacks) that both ACH and SEPA lack. By contrast, credit card adoption is historically much lower in Europe (especially when segmented by country), so it makes sense that SEPA, for all its drawbacks, would catch on as a more popular method. Of course, all of these pale in comparison to India's payment schemes, which are light-years ahead.
- numair 4y agoThis seems like one of those “unlock greater efficiencies” type deals where both parties earn an effective 0% margin on each others’ business. Both payment processing and cloud computing are very low margin when you’re handling business for a savvy customer who knows how to reduce costs. From a data perspective, it would seem that there would be some major implications for this particular deal. If Stripe can gain a window into the purchasing habits and volumes of Amazon’s massive customer base (not the actual items, but the size and frequency), it seems like it’d be a major boost to the depth and breadth of its machine learning models. For Amazon to give that sort of capability to another company — which seems to have begun a few years back — seems quite remarkable to me. On this same line of thought, I would assume that Apple has been working to bring more and more of its payment infrastructure in-house, as it’s a major area of data leakage (regardless of whether the data is merely used to train fraud prevention models, or to do something more “interesting”). Maybe someone with actual knowledge on these matters will comment here…
- morpheuskafka 4y agoI don't understand how Amazon needs or can use Stripe in the US (I can see how it would be useful for the emerging markets they were previously using). As the largest merchant in the country, don't they already have direct negotiations with banks and compete for the lowest possible fees?
- bethling 4y agoFrom my time with Amazon's payments team, they do. However they do like not depending on any one particular provider, and being able to spread the payments to different providers does give them leverage to negotiate rates from a stronger position.
- jaywalk 4y agoI bet fraud detection is a big part of it, if not the only part of it.
- capableweb 4y agoJudging by this release, Amazon seems to acknowledge they cannot handle payments as well as Stripe (makes sense, companies focusing on one thing usually does that thing better than a company focusing on 100s of different things). Also, isn't the saying something like "outsource anything that isn't your core competence?" and I'm guessing Amazon is doing just that here. This statement is what lead me to have the above perspective: > “Stripe has been a trusted partner, helping accelerate our business at every turn,” said Max Bardon, vice president of payments, Amazon. “In particular, we value Stripe’s reliability. Even during peak days like Prime Day, Black Friday, and Cyber Monday, Stripe delivers industry-leading uptime. We appreciate Stripe’s relentless commitment to putting users first.” Translated: Stripe has better reliability than the systems we've setup ourselves, especially during peak days.
- ceejayoz 4y agoI don't read that as "Stripe has better reliability", just "theirs is as good as ours, don't worry". Amazon doesn't tend to have trouble with payments on Prime Day or Black Friday; they've got a fairly huge benefit of not having to charge in realtime, as they typically charge at the time of shipping. I suspect the bigger appeal to Stripe is all the international alternative payment methods that Amazon doesn't have to worry about with Stripe handling it.
- capableweb 4y ago> We couldn’t run without AWS [...] said David Singleton, chief technology officer of Stripe I know this is a PR piece, but shouldn't a CTO know better? What could they possible not have achieved if they weren't using AWS? Literally every feature of AWS exists somewhere else. Maybe not all of the same features in the same place, but to say they couldn't run Stripe without AWS strikes me a bit silly.
- jaywalk 4y agoYou said it yourself, it's a PR piece. After signing a massive deal with Amazon, you want the CTO to say "yeah, our software could easily run on Azure or GCP, but Amazon just gave us a massive deal so we're sticking with AWS." Don't take it literally.
- capableweb 4y agoEven so, saying something like "We really like AWS so that's what we're doubling down on" (but with more PR/flowery language) rather than "Stripe would be impossible without AWS" would have been a more balanced statement while still a giving them praise.
- chuckwnelson 4y agoI just assumed its hyperbole. In the same way I would say "I couldn't live without Diet Coke."
- spiderice 4y agoMeh, I feel like you're taking a common expression and reading it too literally. "I couldn't have made it to the top of the mountain without these specific hiking boots" doesn't mean it was literally impossible without that exact brand of hiking boots. It means they like the boots, it made the experience better for them, and they think the hiking boots are better than comparable ones. I don't think the CTO is claiming that Stripe is solving a problem that would be impossible to solve without AWS. He's saying we wouldn't be as well positioned today if we had to solve the problems that AWS solves ourselves, or by relying on their not-quite-as-good competitors.
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- mmaunder 4y agoWhy? Amazon is known for vertical integration. And AWS has so many big customers that losing Stripe shouldn’t move the needle. Is Amazon playing possum to acquire them, and Stripe is playing along?
- FpUser 4y agoFriendship without the limits ...
- ecommerceguy 4y agoSo is Amazon Pay just arbitraging Stripe's standard 2.9%? https://pay.amazon.com/ https://pay.amazon.com/
- ecommerceguy 4y agoOnce again downvoted even though I'm 100% correct. “Under the new agreement, Stripe will become a strategic payments partner for Amazon in the US, Europe, and Canada, processing a significant portion of Amazon’s total payments volume across its businesses, including Prime, Audible, Kindle, Amazon Pay, Buy With Prime, and more,” the Stripe post said. Amazon Pay isn't working for free, they are arbing the spread between 2.9 and 2.1.
- bluelightning2k 4y agoAmazon must have seriously considered not only bypassing a company like Stripe but also competing with them. I'm sure Amazon Pay or AWS Payments or whatever must have got some serious consideration. Not to mention every bank offering a direct relationship.
- Brystephor 4y agoI had a short period where I worked in Amazon payments. Max Bardon was the L10 or whatever above me. Amazon likes to diversify their payment processors. They don't have one payment processor for one region because it's an availability issue for them. Cost of payments is big. So this is likely some agreement to help Amazon reduce their cost of payments, by essentially redirecting costs to the AWS side of things. India likely isn't being processed because India has regulations that most other countries do not. Adyen, Braintree, and maybe not even Stripe can be payment processors there (if they are, they're likely just a proxy for another processor).
- alsodumb 4y agoIt's also party because India has a robust ecosystem of local companies that handle payments, including real-time payment methods such as UPI that are specific to the country and these are already well integrated into Amazon.in Honestly the ubiquity of UPI and the rate of it's adaptation in India always surprises me. I hear stories of how small, often illiterate vendors selling tea for 10 cents on the streets would insist on getting their payment through UPI and not cash because it's more seamless. UPI handles about 200 million transactions a day in India. I think Visa does like 150 million on their global network? https://en.m.wikipedia.org/wiki/Unified_Payments_Interface https://en.m.wikipedia.org/wiki/Unified_Payments_Interface
- chimeracoder 4y ago> It's also party because India has a robust ecosystem of local companies that handle payments, including real-time payment methods such as UPI that are specific to the country and these are already well integrated into Amazon.in Just to add, UPI is actually no longer limited to India. Several other countries either are currently using it or have contractually agreed to and are in the process of integrating it and rolling it out.
- fy20 4y agoThe UPI system is great, unless you are a tourist, who doesn't have access to it. On a recent trip to India we came across many weird payment rules that made our trip much harder than it should have been, it felt like going back to the early 2000s where you had to pay cash for everything if you travel abroad. Although Visa is everywhere, most places do not accept foreign cards. We stopped in a rest stop on a highway and they had a large food court with a mixture of Indian and Western brands - had to pay cash for all of it, as my card was always rejected by their bank. One time I had to pay for my accomodation by cash, as their bank would not allow them to accept foreign cards or foreign bank transfers. I had pay 70,000rs (around $850) which meant going to a cash machine and taking out repeated transactions of 10,000rs (the ATMs also have limits for foreign cards). If you aren't familiar with Indian cash, that's a big stack, around 160 notes. It felt like I was doing something illegal :D If you try to buy something online, almost everything expects you to use UPI. If they do accept cards, then they almost always have the same rule about foreign cards. For example we wanted to buy bus tickets from Red Bus, but couldn't. The only places we found that consistently worked was Swiggy and Uber.
- college_physics 4y agoDo these "partnerships" ever specify more binding conditions (exclusivity in some market, a minimum commitment of business over some period of time etc). Obviously the public announcements are a great opportunity to co-promote respective entities, but how much do these actually constrain business options?
- vishnugupta 4y agoI worked on Amazon Payments systems for quite some time back in the day. We took pride in being the best payment processors. Had direct connections with card networks, banks and what not. We even launched a PayPal competitor[1]. They launched a Square like device for physical retailers[2]. They invested some serious money in building and maintaining all of that. However going by this news seems like Amazon has more or less given up on their payments ambitions. Could be also due to recent layoffs. This is a big news. Maybe Amazon wants to focus on being good at few things instead of running hundreds of experiments. Edit: References. [1] https://pay.amazon.com https://pay.amazon.com [2] https://www.forbes.com/sites/ryanmac/2015/10/30/amazon-kills-credit-card-reader-and-square-competitor-register/?sh=1fe756ae2ca8 https://www.forbes.com/sites/ryanmac/2015/10/30/amazon-kills...
- remus 4y ago> However going by this news seems like Amazon has more or less given up on their payments ambitions. Could be also due to recent layoffs. This is a big news. Maybe Amazon wants to focus on being good at few things instead of running hundreds of experiments. This does seem very un-amazon from my outside perspective. In the past I've always had the impression that amazon are very happy to shovel money in to an area if they think it'll improve their margin and/or protect them from reliance on third parties. This seems exactly the opposite of that! Stripe must be spending a shit load of cash with AWS and offering amazon a pretty attractive rate for processing. I wonder if GCP has been fishing for stripe's business?
- acdha 4y ago> I wonder if GCP has been fishing for stripe's business? That would make a lot of sense: they mention increasing their use of AWS and this is something that neither Google nor Microsoft could really match as the carrot for an exclusive commitment. Stripe is already pretty big but being able to say Amazon trusts them with payments is a pretty strong sales pitch.
- ROFISH 4y agoJust noting from my experience that many e-commerce platforms like Shopify have started charging an extra "third-party payment fee" for not using their own payment platform so all the savings gained from lower fees would've been ate up by the other platform. Being aggressive in banks is only half the equation. You also need to be aggressive against the e-commerce platform's own greediness.
- sfmike 4y agofast forward to future post title "I can't checkout anymore on Amazon because I'm banned on stripe from black box algorithms and I don't know why"
- rabuse 4y agoStill waiting for the Apple Pay partnership.
- pifm_guy 4y agoEveryone is missing the main point of this partnership.. By merging data about every purchase, both Amazon and stripe benefit dramatically from lowered fraud rates. Suddenly Amazon now knows when payments on your card are likely to bounce because you're at your credit limit, so they can pick the best time to send you promotional messages. Stripe 'intelligence' can now have a much stronger good/bad signal for every card. This deal is primarily a data deal, and both parties will benefit to the tune of hundreds of millions of dollars.