Amazon


AMZN

is making continuous efforts to gain from the growing popularity of contactless payments. This is evident from the company’s new contactless device, Amazon One, which allows users to use their palm for making payments.

To use the new service, users needs to insert their credit card into the Amazon One device and hover their palm over the device to create a signature. The new service will then allow customers to make payments at Go stores. It will also allow users to enter their location like a stadium or workplace, among other day-to-day activities, to make accessing the location quickly and easily.

As of now, these palm-based scanners are available at only two Amazon Go stores in Seattle. However, the company plans to expand this concept to other store locations in the coming months.

Keeping in mind security-related issues, the company has also ensured that the palm images will not be stored on the Amazon One devices. In fact, the encrypted images will be sent to a secure area in the cloud, wherein customers’ palm signatures are created.

Strong Growth Projections

Per a latest report from MarketsandMarkets, the global contactless payment market is expected to hit $10.3 billion in 2020 and reach $18 billion by 2025, witnessing a CAGR of 11.7% between 2020 and 2025.

Increasing use of smartphones and Internet has resulted in the growth of payments apps. Additionally, demand for mobile Point-of-Sale and peer-to-peer payments is likely to increase in this period.

Further, change in consumer behavior — especially rising adoption of e-commerce — will drive online payments volume.

Moreover, the coronavirus-induced crisis has resulted in a sharp hike in online shopping orders as people are under house arrest in order to curb the spread of the COVID-19 pandemic.

All these factors are likely to benefit Amazon amid the coronavirus pandemic.

Bottom Line

The coronavirus pandemic has changed the way businesses have been operating so long. Social distancing has become a priority to contain the spread of the deadly coronavirus. This has also prompted a change in the way people carry out transactions. Therefore, contactless payment has become the most preferred option over safety concerns.

With the latest move, Amazon has upped its presence in the contactless payment space and posed a challenge to other companies that include Paytm, Alphabet’s

GOOGL

Google, PayPal

PYPL

, Facebook

FB

, which are also leaving no stone unturned to increase their share in this promising market.

Zacks Rank

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


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