Though Amazon.com's Fire Phone sputtered out as soon as it launched, the company has built a solid foundation in mobile payments that will fuel its next big moves in 2015.
News leaked today that the company is undergoing a major reorganization of the division behind the failed Fire phone, which was built around making it possible to scan any object, song or TV show in the vicinity of the user and order it instantly from Amazon.com.
But the reports from Amazon's payments initiatives seem a bit brighter, and will serve as the foundation of anything the company does going forward in mobile and online commerce. Orders processed through one-click Amazon Payments, which debuted in October 2013, grew more than 60% during the Cyber Monday shopping event, compared to a year earlier, the company said today. At the same time, the Login and Pay with Amazon product grew more than 25%.
Overall, orders processed by businesses using Login and Pay with Amazon grew by more than 200% during the holiday season. (Amazon did not supply specific transaction numbers.)
"We're constantly looking to extend the lessons we've learned to provide a better buying experience wherever our customers shop," said Amazon spokesman Tom Cook.
Those lessons extend to Login and Pay with Amazon, Amazon Wallet (a digital wallet app) and Amazon Local Register (a Square-like mobile card reader), Cook said.
"We know that customers shop in a lot of places, not just Amazon," Cook added.
Currently, Amazon's mobile wallet functions in the same manner as Apple's Passbook, essentially a container for digital gift cards and other applications.
On mobile devices, the Amazon Payments product is more seamless, tapping into the payment accounts consumers already use for shopping on Amazon.com. Amazon attributes the product's volume increase primarily to its one-click payment process.
"Customers don't have the time or desire to constantly enter their payment information or shipping information on every website they visit," Cook said. "Amazon Payments removes that friction."
Consumers are quick to pick up on the improvements Amazon has made in its payment offerings, said Brian Riley, senior research director and analyst with Boston-based CEB TowerGroup.
"There is so much going on in the market, it is very good to see Amazon upping their ante in mobile payments," Riley said. "Amazon has a huge base to deal with it, and they have had good follow-through on their payments growth."
But even in payments, Amazon has had a few hiccups. The company was vague about the details of its October discontinuation of WebPay, a person-to-person payment product, only saying it "learned a great deal about how and when customers want to send money and will look for ways to use those lessons in the future." Its Local Register product also launched to lackluster reviews from frustrated merchants.
But in e-commerce, Amazon remains the "800-pound gorilla in the card-not-present transactions space," said Thad Peterson, senior analyst with Boston-based Aite Group.
"Amazon Payments is growing rapidly because the one-click from a mobile device fits in as commerce migrates to a smaller form factor," Peterson said. "It is difficult to search various different merchant sites on a four-inch screen."
Essentially, Amazon is capitalizing on a change in consumer behavior in moving to smartphones and away from laptops and desktop computers for e-commerce transactions, Peterson added.
With the Chinese e-commerce allies Alibaba and Alipay hinting at international partnerships with PayPal and Apple, Amazon's latest numbers signal the company also is in a good position to defend its turf in the U.S. and other countries where it operates.
For its part, Amazon has also been aggressive with expanding Amazon Payments into new regions. It launched the system in India and expanded it throughout Europe last year.