Those claiming subscription models can’t work in the digital age are probably ignoring Amazon Prime.
The Pay with Amazon numbers are out today, and are of course climbing, an unsurprising development considering the majority of consumers that use it—which currently weigh in at 33 million—happen to be members of Amazon’s Prime service, one of the only thriving online subscription models.
Prime costs users $10.99 per month, but subscribing to the service does not mean customers are obligated to make their purchases through Amazon Payments, which the company advertises primarily towards its merchant clients and not to the individual consumer.
However, the company considers its Prime users as its core customer base, and Amazon’s focus on retaining the loyalty of those consumers (with new streaming services, shows, deals, music, and books) has produced clear results. Over 65 million consumers are currently members of the Prime service, inclduing 50% of the company’s 33 million Pay customers.
Amazon also has one key advantage: before it was anything else, it was an e-commerce website, and its customers are long used to paying online—making them far more likely to hit the “Pay with Amazon” button on an individual merchant’s site.
Patrick Gauthier, vice president for Amazon Payments, said in a statement:
As we have introduced new experiences with merchants, we have seen a significant increase in the number of customers using the information from their Amazon account to make purchases on merchant websites.
Amazon Payments connects merchants with customers that are accustomed to making purchases online. By connecting with these customers, merchants are driving higher conversion, increasing sales and ultimately growing their business.
Loyalty to Amazon also makes customers likely to buy more things—the consumers using Amazon’s service have basket sizes up to 33% higher than non-Pay with Amazon customers, according to a statement by the company. Payment volume also nearly doubled since last year — and 32% of those transactions were conducted on mobile.
Amazon Payments has expanded to thousands of merchants in more than 170 countries, including recent European launches in France, Italy, and Spain.
The average transaction for a Pay with Amazon purchase was $80. While the company did not report a low, the highest transaction amount for the service was $40,000.
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