Amazon Exec Says Company Decided Against Accepting Bitcoin
Published on April 14, 2014 at 18:35 GMT
Amazon is not interested in embracing bitcoin, but it is looking into new digital payment services, possibly a service developed in-house, a new report suggests.
The company's payments head Tom Taylor told Re/code that Amazon did indeed consider bitcoin, but eventually decided that there was not enough interest in the technology for Amazon to benefit from adopting it.
"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."
Amazon’s revenue in 2013 was almost $75bn, while the market cap of all bitcoins ever created is roughly $5bn.
Amazon has more pressing issues
Taylor pointed out that Amazon has bigger goals at the moment than experimenting with digital currencies. For example, he noted that Amazon needs to deal with foreign exchange rates and other issues affecting sellers.
The Amazon exec admitted that a global currency has some advantages, and that credit card companies are not supplying enough information that could help merchants better understand customer behaviour.
When asked whether Amazon would ever launch a service that would compete against big brand credit cards, Taylor said Amazon would only if it felt confident that it could do a better job than American Express and Visa.
He added that the service would have to be “something much better” than what is already available.
Re/code’s Jason Del Ray cited industry sources who believe it is only a matter of time before Amazon launches its own payments service, but the company is not saying much for the time being.
Amazon's payments history
Interestingly, Amazon started experimenting with its own digital coins last May.
Amazon Coins were handed out to buyers of Kindle Fire tablets and could be used to purchase apps and various virtual items on the company's app store.
Of course, Amazon Coins were never envisioned as a currency or as an alternative payments system, they were basically a way of boosting customer loyalty and promoting the Amazon Appstore. Although Amazon's tablets are Android-based, they run a tweaked version of Google's mobile operating system and don't feature access to the Google Play Store.
Amazon is rumoured to be working on one or more smartphones that should use the same approach as its Kindle Fire tablets, so the company has a good reason to promote its closed app ecosystem.
Bitcoin not seeing interest from big brands
Earlier this year, Overstock became the biggest US retailer to accept bitcoin, and two months later the company announced that its bitcoin sales had surpassed $1m. Overstock CEO Patrick Byrne said the biggest surge came on the first day of bitcoin sales, but the company also saw gradual growth in bitcoin sales on a week-by-week basis.
TigerDirect joined the bitcoin club a few weeks after Overstock. The results were similar, the tech retailer surpassed $1m in bitcoin sales in less than two months. The company's director of marketing Steven Leeds told CoinDesk that the overwhelming response validated the company’s decision to embrace bitcoin.
Still, outside of these examples, and a handful of rumours, merchant adoption has not seen the traction some predicted at the start of the year.
Amazon’s arch rival eBay is staying away from bitcoin, too, but at least it is allowing users to sell their bitcoins and bitcoin-related merchandise through its classifieds.
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