Is About to Eat PayPal's Lunch? is bringing its powerful "One-Click" buying to a store near you; PayPal should be concerned.

Jun 9, 2014 at 1:03PM
Take The Long View

The Dow Jones Industrial Average (DJINDICES:^DJI) is slightly higher this afternoon as investors continue to fuel the now 62-month-old bull market.

Online retail behemoth (NASDAQ:AMZN) made headlines this morning, announcing a move that will bring Amazon's powerful customer base to start-ups and other companies around the globe.

How? By opening up Amazon's payment processing capabilities for subscription payments, a feature long dominated by eBay's (NASDAQ:EBAY) PayPal division.

The power of "1-Click"
The move makes perfect sense for Amazon, with a customer base of more than 240 million online shoppers and an existing network of third-party sellers that generate approximately 40% of Amazon's sales.

The Amazon payment interface is one of the most frictionless checkout processes in the world -- if not the most frictionless. Buyers on Amazon can purchase a good or a monthly subscription for a service or product with the single click of a button -- no credit card input, no shipping or billing address. Click once and you're done. It's almost too easy.

This is made possible because Amazon stores both credit card and shipping information on its cloud database.

Amazon Box Fool Flickr

The new service announced today does not make full use of Amazon's existing database, which is actually a positive for the start-ups and merchants considering using the service. Amazon will handle only the dollar amount of each transaction, without necessarily receiving any further details about the product or customer.

This gives merchants a level of protection against Amazon moving into a competitor role and stealing customers. At the same time, though, these start-ups and small businesses can leverage the trust and brand recognition associated with the Amazon name.

Analysts expect there is more to come
Many analysts see the move as a logical precursor to a more bold move into mobile payments. 

Later this month Amazon is expected to unveil its first smartphone product to compliment its existing line of e-readers and streaming TV players. With the introduction of the smartphone, a move into payments fits with Amazon's long-term strategy of increasing the company's presence in the consumer's life.

Amazon wants to be the one-stop shop for goods and entertainment, so why shouldn't they also be the middle man in your payment processing?

Traditionally, this role has been the sweet spot for PayPal, which I delved into in my report on the digital-payment industry earlier this month. But Amazon's competitive advantage over PayPal is twofold. First, there's Amazon's unparalleled brand recognition in the online retail space. Second, and more critically, Amazon has an incredibly smooth checkout experience in "1-Click," which is a patent protected feature.

Throw in a highly integrated mobile payments app on the new Amazon smartphone, and PayPal may find itself reeling from the power of Amazon's 240 million existing customers.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends and eBay. The Motley Fool owns shares of and eBay. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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