Shopify and Amazon are at it again, this time over Amazon’s recently launched Buy With Prime one-click checkout service.
Related Reading: Shopify vs. Amazon: An In-Depth Comparison
Shopify Considers Buy with Prime Against its ToS
Shopify, the smaller of the two ecommerce powerhouses, has started warning its sellers that integrating Amazon’s Buy with Prime feature into their Shopify stores could allow Amazon to steal their customer data, according to a recent report by Marketplace Pulse.
Launched earlier this year, Buy with Prime is an Amazon plugin that basically lets consumers enjoy Prime membership benefits while shopping on non-Amazon online stores.
This is a 180-turn for Shopify, which seemed to welcome Buy with Prime with open arms during its Q1 2022 earnings call, although reports soon came of internal debates within the company about whether it should actually integrate Amazon’s feature into its platform or not.
According to the report, sellers who are trying to install the Buy with Prime add-on to their Shopify stores are getting pop-ups, warning that such action is a violation of Shopify’s terms of service and could have negative consequences like fraud, shipping delays, data leaks, and incorrect charges.
Shopify’s terms of service requires sellers to use Shopify Checkout (ergo, checkout must be on Shopify), which is the specific condition Buy with Prime is said to be violating. Its ToS says that sellers may use checkout integrations that are part of Shopify’s payments platform.
Buy with Prime Makes Amazon Services Available Outside of Amazon.com
Amazon’s Buy with Prime was launched just in April of this year, with some analysts calling it the “Shopify killer” for seemingly catering specifically to Shopify store owners and being in direct competition with Shopify’s proprietary checkout service, Shop Pay, which it presumably wants to make the default checkout option for Shopify stores.
The feature is an add-on checkout service that online sellers can integrate into their Shopify store or third-party ecommerce website. When installed, Buy with Prime adds Amazon’s well-known Prime widget on the checkout page, basically making Amazon Pay and its robust fulfillment services (Amazon FBA) available to customers shopping outside of Amazon.com. Since it benefits customers with perks like free Prime delivery, free next-day delivery, and free returns, many Shopify sellers are opting to integrate Buy with Prime into their Shopify-run stores.
Amazon Says Buy with Prime Is Secure
Contrary to what Shopify is claiming, Amazon says it does not steal data from Shopify customers and that it protects data obtained via Buy with Prime using high security standards. Amazon claims it uses the data from Buy with Prime to improve the product for sellers and shoppers.
The tech giant also denies Shopify’s claims of potential fraud, saying that Buy with Prime uses the same fraud protection technology used on its own Amazon.com platform.
Analysts believe Shopify does not want to lose transactional fees to Amazon when customers use the Buy with Prime button at checkout. Over the past couple of years, Shopify has been making moves in direct competition with Amazon, particularly in-house services that make it easier to set up an online store on Shopify without heavily relying on Amazon or other third-party services.
Shopify and Amazon are Directly Competing on Multiple Fronts
The competition between Shopify and Amazon continues to heat up:
- Just this year, Shopify acquired shipping logistics startup Deliverr for $2 billion in the hopes of upgrading and expanding its Shopify Logistics Services. Many Amazon sellers use Amazon’s more built out Fulfilled by Amazon (FBA) program and its Multi Channel Fulfillment (MCF) service.
- Shopify also recently invested in Klaviyo, which is one of the most widely used email marketing software among ecommerce sellers, particularly third-party Amazon sellers. It intends to make Klaviyo the recommended email product for Shopify Plus, its premium merchant plan, while granting Klaviyo early access to in-development Shopify features.
The battle over checkout services is just the latest development as competition ramps up for US ecommerce, and Shopify is just one of several companies gunning for a piece of Amazon’s dominant market share.