Prof­it­ing from Ama­zon’s Strat­egy

Ama­zon’s global e-com­merce strat­egy is am­bi­tious and far-reach­ing. But it still leaves gaps that other com­pa­nies can fill in.


Many com­pa­nies in the pay­ments in­dus­try po­si­tion them­selves as the an­swer to the com­pet­i­tive threat of Ama­zon. But that’s not the only op­tion out there.

“We do po­si­tion our­selves as Ama­zon ex­perts,” said Richard Gil­bert, direc­tor of strate­gic part­ner­ships in North Amer­ica for Pay­oneer. “It’s core to our strat­egy to work with Ama­zon sell­ers, and it is the bulk of my busi­ness as well as a sig­nif­i­cant per­cent­age of Pay­oneer’s over­all busi­ness.”

Small e-com­merce busi­nesses — the ones that sell within Ama­zon’s ecosys­tem rather than try to com­pete with it — are vi­tal to Pay­oneer’s in­ter­na­tional ex­pan­sion strat­egy as the ven­dor works to go be­yond fa­cil­i­tat­ing mass dig­i­tal pay­outs on its whole­sale busi­ness side.

Pay­oneer’s abil­ity to con­vert 150 cur­ren­cies as part of its money trans­fer and e-com­merce pay­ments ser­vices puts it in a po­si­tion to stake a claim as the largest provider of those ser­vices for Ama­zon sell­ers.

Even though it is not the only mar­ket­place in which New York-based Pay­oneer en­ables sell­ers to ex­pand to en­tire new mar­kets of con­sumers, Ama­zon rep­re­sents a ma­jor en­abler of Pay­oneer’s busi­ness model.

“It all starts with a mar­ket­place like Ama­zon, and we have been able to re­duce the bar­ri­ers to en­try by en­abling a for­eign seller to en­ter an­other coun­try and sell goods and ser­vices,” Gil­bert said.

In that man­ner, Pay­oneer fa­cil­i­tates the pay­outs to sell­ers in 25 cur­ren­cies that Ama­zon does not sup­port, work­ing through the re­la­tion­ships the com­pany has es­tab­lished with nearly 50 banks.

Pay­oneer does not stray far from its fo­cus as a money trans­mit­ter and con­vert­ing of one cur­rency to an­other. It is not a mer­chant pro­ces­sor like Stripe and oth­ers, so Ama­zon and other mar­ket­places act as the mer­chant of record.

Pay­oneer has a dif­fer­ent niche than what other providers seek from China and other mar­kets, such as Stripe’s re­cent col­lab­o­ra­tion with Wechat and Ali­pay to make it eas­ier for mer­chants around the world to ac­cept pay­ments from Chi­nese con­sumers.

Mostly, Pay­oneer comes into play when a seller on Ama­zon’s U.S. site wants to make the move to Ama­zon U.K., Ama­zon China or other mar­kets.

And it keeps Pay­oneer in a good spot, as it has found one of the few pain points that Ama­zon doesn’t ad­dress on its own, said Gil Luria, direc­tor of re­search for eq­uity cap­i­tal mar­kets at D.A. David­son & Co.

“There may be lim­ited op­por­tu­ni­ties to add value as a pay­ment provider on Ama­zon,” Luria said. “These op­por­tu­ni­ties may be capped by the fact that Ama­zon broadly han­dles most pay­ments as­pects and if an op­por­tu­nity be­came too big they would ad­dress it in­ter­nally.”

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