Amazon uses Prime Day to promote Amazon Pay on third-party sites

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Amazon is using Prime Day to nudge more customers to use its own digital payment method on partner retailers’ websites, and it’s using juicy incentives of up to 30% cash back to do so.

Prime Day, Amazon’s annual discount event for Prime members, currently is underway through July 16. With an engaged audience eagerly seeking to spend money, the e-commerce behemoth is using the opportunity to promote the use of Amazon Pay. Amazon Pay lets customers use payment methods associated with their Amazon accounts for goods and services on third-party websites and apps, as well as through voice assistant Alexa.

Amazon did not respond to a request for comment, but industry observers argue the incentives are vehicles to encourage customers to change their default payment behaviors on e-commerce platforms and think of Amazon Pay as a viable payment method. They also help Amazon Pay get a leg up on competition.

“The incentives underline the fact that Amazon is much more than just a retailer and is using Prime Day to activate other parts of the business, including payments,” said Neil Saunders, managing director of consultancy GlobalData Retail. “The payments space is very crowded, and Amazon has to give consumers a positive reason to use [Amazon Pay].”

Once a customer makes a purchase on an eligible third-party e-commerce site, cashback incentives are made available through top-ups to customers’ Amazon gift card balances. The cashback incentives are offered on more than 35 e-commerce sites, including large brands like Vineyard Vines, Chico’s and Brooklinen. Cashback rewards are only available on retailers’ e-commerce sites and not on their storefronts, a move designed to help improve Amazon Pay’s brand recognition among customers.

“Attaching Amazon Pay to some better-known brands is a good way to provide an awareness boost to help drive adoption,” said Andrew Lipsman, retail and e-commerce analyst at eMarketer. “It also sends a message to other e-commerce retailers that integrating Amazon Pay could be a path to more conversions.”

Over the past year, Amazon Pay has been on a path to grow its reach beyond Amazon’s ecosystem. In March, the company entered into a partnership with Worldpay, a company that works with 1.1 million merchants across the U.S. It’s also noted in previous job postings that it has ambitions to position the payment tool alongside heavyweights like PayPal.

Since user adoption will continue to be a hurdle for Amazon Pay, rewards can help the payment tool acquire more users. “The incentives suggest the challenges of changing the habits of customers,” said David True, partner at Paygility Advisors. “If you shop often enough at a merchant that you have a card on file or if you use PayPal, there is no incremental benefit, so you need to provide one.”