The Internet’s largest retailer–Amazon.com–won’t be accepting Bitcoin, at least not for the time being. While other major retailers including TigerDirect and Overstock.com have been at the forefront of accepting the virtual currency it has yet to be adopted by a high profile mainstream retailer.
At one point Amazon was considered a revolutionary company but based on this mealy mouthed statement from payment head Tom Taylor their now strictly status quo:
“Obviously it gets a lot of press and we have considered it but we’re not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage Bitcoin.” There may be more to Amazon’s decision that meets the eye. It has been a persistent rumor in investing circles that Amazon is looking to get into the payment services business in some form or another. First, let’s hear another mealy mouthed denial from the aforementioned Mr. Taylor:
“If we felt like we could do a better job than Amex and Visa, and feel like it helps the customer experience, that’s something we would do. But it would really have to be something much better than [what they do].” A number of investment analysts familiar with the company think that Amazon is up to something on this front though at this point it’s not clear what exactly they have in mind. They have several options on this front–they could set up or acquire a payment network much like Ebay did with PayPal. Alternately they can assume a credit risk and issue some form of credit card like American Express or a traditional bank. Amazon reportedly has over 200 million credit card numbers on file and that alone why a payment network or similar scheme would be attractive to the company. Currently, someone else gets a cut of all of those transactions and Amazon could be thinking about the money they could make keeping it in house.
Which brings us back to Bitcoin–given the fact that they may be investing in the status quo payment system there’s an obvious disincentive for Amazon to help disrupt that system. This is why Bitcoin is such a scary concept for many in the banking and financial system–it democratizes the process and that makes it harder for them to make money.