Amazon Expanding SMB Ecosystem

In business, competitive advantage is the goal — and there are many ways to get there.

For Amazon, of course, you might say that the installed base of millions of merchants is an inherent strategic advantage.

Especially when it comes to unveiling, and spurring adoption of, new financial services. The development of any new connected economy/ecosystem depends on keeping customers and users in place, actively blending in lending/payment activities into their operations.

Amazon, of course, reportedly is developing a point-of-sale (POS) solution for third-party retailers that is intended to compete with Shopify, PayPal and others.

Read also: Amazon’s Project Santos Developing SMB POS 

In terms of the details, the POS, at least as it’s being proposed in an internal Amazon document, will be able to process transactions online and in brick and mortar locations. That same POS will also ostensibly be able to help track inventory, link to Flex delivery and offer various checkout options.

Here, then, is evidence of the continued buildout of a small and medium-sized business (SMB) ecosystem that takes Amazon ever further away from its roots as a strictly eCommerce player (and light years away from its early days as an online bookseller). The omnichannel nature of the POS solution, as defined by the most recent news reports, speaks volumes about Amazon’s interest in meeting SMBs where they might be, in a way that is fluid as the SMBs have to be, too.

And yes, it’s a direct shot across the bow aimed at companies such as Square, a firm also focused on developing a broad swath of services for enterprise clients to manage payments and day-to-day operations.

Amazon recently inked a deal with Affirm to help boost payments optionality, in this case by offering buy now, pay later (BNPL) choice as a credit card alternative. Separately, through Amazon Lending, the company offers  financing that in turn can keep inventory and, by extension, sales, humming.

Learn more: Amazon Moves Into BNPL With Affirm Partnership

The platform model — take your pick about which firm you’re talking about — has the inherent advantage of being able to scale, horizontally, across a range of services and products that can be used interchangeably and concurrently.

Room for BNPL 

There’s room, right now, for BNPL to take more of a center stage as merchants wish to keep sales buoyant, particularly into the holiday season.

As noted in a recent PYMNTS report, The Second-Chance Consumer: How Buy Now, Pay Later Payments Create New Merchant Opportunities, a PYMNTS and Sezzle collaboration, about  23% of American adults may need a “second chance” to gain access to the kind of low, affordable payments that a higher credit score would provide.

And the offering is gaining traction, as roughly 28 million U.S. consumers made at least one purchase using BNPL. Roughly three-quarters of “second chance” consumers who want those affordable payments have said that having access to BNPL would spur them to make purchases more frequently.