AMZN – Amazon Makes Another Mobile Payments Move with GoPago Buy

by Alyssa Oursler | December 17, 2013 1:42 pm

Amazon (AMZN[1]) clearly isn’t satisfied with disrupting brick-and-mortar retailers like Best Buy (BBY[2]) and Staples (SPLS[3]). It also wants to disrupt the payments world, if its most recent mobile payments acquisition is any indication.

amazon-amzn-mobile-payments-gopagoAMZN just supposedly snagged Italian mobile payments startup GoPago — a company that competes with Square and the PayPal unit of eBay (EBAY[4]).

While the purchase of mobile payments company has yet to be confirmed — and AMZN stock has thus yet to react — Tech Crunch provided a few details[5]. Apparently, GoPago co-founder Vincenzo di Nicola spoke the Italian press, saying that GoPago will begin an “ambitious” project for AMZN.

AMZN – Full of Ambitious Projects

Reports say that tech rival Google (GOOG[6]) was also interested in the GoPago mobile payments startup, making this rumored buy seem like a victory for AMZN.

But those details (and AMZN stock) aside, my first question remains the same: Let’s say the GoPago acquisition is a go and Amazon has a new trick up its sleeve. Are you surprised?

I, for one, am not. Amazon is built on ambitious projects, recently revealing plans for Amazon Pantry[7] — which could disrupt Costco (COST[8]) and Walmart’s (WMT[9]) Sam’s Club — and causing a stir with its plans for drones before that — which could disrupt FedEx (FDX[10]) and UPS (UPS[11]) to name a few.

Tech Crunch speculates on what this new mobile payments project may be. But considering that the acquisition is only a rumor, the ground we’re standing on here is shaky at best. From Tech Crunch:

“Amazon today already offers a few ways for people to use mobile devices to buy things, but for now these are largely limited to in-app payments[12] on apps sold via Amazon’s app store … But there have been some hints for a while that Amazon could be working on something more. Over a year ago, we reported[13] that Amazon was working on a Square competitor. Gopago, with its business firmly rooted in facilitating local commerce by way of mobile devices, could be part of that plan.”

Amazon has made other mobile payments moves lately, including its “Log In and Pay With Amazon” feature. And as TechCrunch nicely summed it up: “Just as eBay and PayPal are working hard to connect the dots between online and offline, mobile and desktop commerce, so, too, may Amazon.”

Will Mobile Payments Actually Help AMZN Stock?

But while moving into the mobile payments space sounds nice, it’s just yet another big idea[14] that is a long way from producing real results. And none of these moves are cheap.

While the price AMZN could pay for mobile payments startup GoPago isn’t released, it’s hardly the beginning of the Amazon spending spree. AMZN has been building data centers and warehouses, while also investing in new technologies like the Amazon smartphone and others we already mentioned. A lot of it sounds exciting … but little of it is close to being substantial.

As InvestorPlace editor Jeff Reeves recently wrote[15]:

“It’s fun to speculate about the potential of drones because of how utterly science fiction the idea is. It’s also fun to compare Amazon’s recent in-house programming efforts like itsAlpha House series with Netflix (NFLX[16]) originals including House of Cards.

But investing isn’t about fun and games. It’s about profit.”

Of course, it’s not like Amazon doesn’t boast an impressive resume, profits aside. Its sales growth is real … and eye-popping. That’s promising especially as companies from Apple (AAPL[17]) to Boeing (BA[18]) use gimmicks like share buybacks to boost EPS and stock value.

But the question remains of how long it will be enough to keep AMZN stock investors mesmerized. And another baby step towards the mobile payments space with GoPago hardly provides a clear answer.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

  1. AMZN:
  2. BBY:
  3. SPLS:
  4. EBAY:
  5. Tech Crunch provided a few details:
  6. GOOG:
  7. Amazon Pantry:
  8. COST:
  9. WMT:
  10. FDX:
  11. UPS:
  12. in-app payments:
  13. reported:
  14. yet another big idea:
  15. recently wrote:
  16. NFLX:
  17. AAPL:
  18. BA:

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