Amazon's payments business processed nearly double the amount of money in 2016 as it did the year before after it expanded into new territory, the U.S. e-commerce giant announced -- as it challenges the likes of PayPal and expands its revenue streams.
The service, called Pay with Amazon, allows customers to make purchases on other websites using details already stored on their Amazon accounts instead of having to re-enter personal details.
In 2016, 33 million customers used Amazon Payments, up from 23 million the year before, the company said. The average transaction size was $80 in 2016, down from $84 in 2015, with the single largest transaction being $40,000. Amazon did not say how much money it processed or the number of transactions in total last year.
"As we have introduced new experiences with merchants, we have seen a significant increase in the number of customers using the information from their Amazon account to make purchases on merchant websites," said Patrick Gauthier, vice president of Amazon Payments, said in a press release.
Amazon began its payment business in 2013 and it is a direct competitor to the likes of PayPal, Apple Pay and Android Pay. In comparison to Amazon's 33 million customer base, PayPal had 197 million active customer accounts in 2016, according to its latest financial results. PayPal processed 6.1 billion payment transactions in 2016, up 24 percent.
Even though Amazon trails PayPal in terms of customers, the appeal of its service is clear for retailers. The e-commerce giant has troves of credit card and shopping data on its customers. Payments are another way for Amazon to make money from this.
Amazon said the growth of its payments arm was driven by expansion into France, Italy and Spain. The number of active merchants using its service rose 12 percent year-on-year as the payments product supported new areas such as government payments, insurance and charities.
