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eBay’s got 99 problems and Amazon Payments is just one

Philip Pearlman
Philip Pearlman

While many are focusing on the event Amazon (AMZN) will hold on June 18th and the launch of its first phone, the more important news might center on the further development of Amazon payments.

Amazon wants to make it incredibly easy for its users to pay for goods and services of other merchants without having to have a credit card on file everywhere else.

The payments space as a whole seems to be heating up at an accelerating pace recently and Amazon, with more than 200 million e-commerce accounts complete with credit card numbers and a trusted brand, could, to quote a 1990’s Jeff Bezos, get big fast and challenge eBay's (EBAY) Paypal for payments dominance.

Facebook (FB) has a gargantuan user base and real identities although it lags far behind Amazon and Paypal in the number of user credit cards. However, with the hiring of David Marcus and a messaging strategy that might emulate Tencent's WeChat, it is likely gunning for a piece of the payments pie. Marcus was the president of Paypal up until Tuesday when Facebook announced it had hired him to run its messaging business. It's a big loss for eBay and a super aggressive get for Facebook.

And we haven’t even mentioned Apple (AAPL) yet, the sleeping giant in the space. Apple has over 400 million user credit cards on file and they dominate the higher end phone market. Not if, but when Apple launches a full out payments solution integrated directly into the iOS software - watch out!

In fact, and while it's a long shot, I would not be shocked if, at next week’s event, Amazon announced functionality built into its new phone that made it incredibly easy for consumers to make payments.

Regardless, the wagons are circling around Paypal and with the loss of Marcus, its larger strategy and market position should be questioned. Recent weakness in eBay stock, off 18% from its March highs even as the broader market continues to make new all-time highs, is probably anticipating a deteriorating outlook for the business.

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