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Amazon is reportedly offering discounts to retailers for using its payment service

Key Points
  • Amazon is offering its credit card discount to retailers adopting Amazon Pay, the company's online payment service, according to Bloomberg.
  • PayPal dropped 4 percent after the report.
  • Amazon appears willing to sacrifice profits in order to grow its payments service.
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Amazon to offer retailers discount to adopt its payment system

Amazon is offering its discounted credit card fees to retailers that adopt Amazon Pay, the company's online payments service, according to Bloomberg.

The report on Wednesday, citing people with knowledge of the matter, said Amazon has offered the discounts to a number of smaller sellers with higher credit card fees than Amazon, which is able to negotiate a lower fee because of its massive user base and sales volume.

Amazon Pay, which has about 30 million users, lets people buy online through their Amazon accounts as an alternative to services like PayPal. It can be offered as an option by sellers. Shares of PayPal dropped 4 percent after the Bloomberg story was published.

Amazon is again showing its willingness to forgo profits in exchange for expanding a new service. The company has been focusing on adding financial products and is reportedly working on launching a credit account service as well.