E-commerce giant Amazon.com Inc. (AMZN) has been dumped by Kickstarter, a crowdsourced fundraising website, as its global payments processor. Instead it has switched to the fast-growing payments service startup, Stripe, which also processes payments for big tech companies including Twitter Inc. (TWTR), Facebook Inc. (FB) and Apple Inc. (AAPL).
Kickstarter, launched in 2009, is a fundraising platform for collecting money from the public. It has been using Amazon Payments as its payments processor since its inception. The online retailer’s payments division has processed more than $1 billion in Kickstarter pledges since 2009.
The shift comes as Amazon is trying to move clients from its customizable checkout service to an Amazon-branded one. Kickstarter decided to shift to Stripe with Amazon deciding last year to stop its payments product, Flexible Payments Service that Kickstarter was using.
Amazon is moving to a new system called Login and Pay, which Kickstarter refused to use as it did not offer the same flexibility as the previous one. As a result, Kickstarter started looking for other options and ultimately opted for Stripe, which it believes will broaden its reach and see higher conversion rates from backers as they won’t have to log in with an Amazon account.
The switch might benefit Kickstarter, but it is definitely not good news for the e-tailer. Shares of the company were down 2.3%. Amazon has been striving to widen the reach of its payment processing software.
Other merchants are also reluctant to sign up with Amazon because they are cautious about divulging their customer data to the company, which is rapidly broadening its geographical presence and contending with other sellers.
Amazon currently has a Zacks Rank #3 (Hold).
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