THE MAIN POINTS
- Marketplace Pulse reports that Shopify is warning merchants that using Amazon’s one-click checkout service is a violation of its terms of service.
- In April, Amazon introduced “Buy With Prime,” a program that lets businesses use Amazon’s expedited shipping services on their own websites.
- Shopify’s proprietary checkout and payment system are called Shop Pay.
Shopify is taking a stand against Amazon’s one-click checkout.
According to research firm Marketplace Pulse, Shopify is discouraging merchants from incorporating Amazon’s “Buy With Prime” button into their online stores because doing so violates the platform’s terms of service and poses security risks. In April, Amazon introduced Buy With Prime in an effort to help online retailers increase their customer base through increased exposure to Amazon customers. Through this service, businesses can promote Amazon’s expedited shipping options and display the Prime logo on their own websites. A Prime membership allows shoppers to use their Amazon accounts at checkout.
According to a notice, Shopify sent to merchants (screenshot included), the platform will not defend merchants against fraudulent orders placed through Buy With Prime. This notice also cautions users that Amazon’s service may steal sensitive information and make incorrect charges. Shopify requires all merchants to use Shopify Checkout “for any sales associated with your online store” as part of their terms of service.
Shopify includes a checkout integration as part of its payments platform, which merchants can use. Payment processors must accept the terms of Shopify’s Partnership Program Agreement and Application Programming Interface (API) to join the platform. To a certain extent, Amazon’s Buy With Prime service is in direct opposition to Shopify’s Shop Pay, an instant checkout and payment service. Last year, Shopify made partnerships with Facebook and Google to allow users to make purchases without leaving those sites.
When Amazon first announced Buy With Prime, Shopify CEO Tobi Lutke said his company was “happy” to incorporate the feature into its own. “This fits perfectly into our world view,” Lutke said to shareholders during the first quarter earnings call. It’s not a zero-sum game, despite what some may say.
Maybe behind closed doors, Shopify wasn’t quite as enthusiastic about Amazon’s Buy With Prime program. There was apparently some internal debate at Shopify about whether or not to implement the feature after the launch, as reported by The Information in May. In addition, a Shopify representative emphasized that Lutke’s statements were merely his personal opinion and that the company needed more information before making a decision.
According to a statement provided to CNBC by Shopify, “Shopify believes it is a good thing when a company like Amazon opens their infrastructure to more independent businesses to succeed in commerce.” In recent years, Shopify has emerged as a strong competitor to Amazon for online merchants. The Canadian firm’s initial product was software to help companies establish an online identity. In May, Shopify purchased Deliverr, a third-party fulfillment service that puts it in direct competition with Amazon’s logistics division.
According to a representative from Amazon, “We protect information collected via Buy with Prime, including shopper data, in accordance with Amazon’s high-security standards,” which directly refutes Shopify’s claims that Buy With Prime is unsafe. We’ll be using this data to better serve both sellers and buyers through Buy with Prime.
In order to facilitate the payment of Buy with Prime orders, we utilize Amazon Pay. They also noted that “Amazon Pay is supported by the same fraud protection technology utilized by Amazon.com.” Prices charged to customers are entirely within the discretion of merchants. As a means of protection for its merchants, Shopify has warned that infractions of its terms of service may result in a warning.
