Posted on 11 Sep 2017
11 September 2017
Reality Check: Amazon’s 1-Click for all online retailers?
On 11th September 2017, 20 years after its launch, the patent for the 1-Click service from Amazon expires. The 1-Click process was revolutionary at the time of launch as it allowed online purchasing with a single mouse click. Patent number 5.960.411 has always been controversial and has been a model for trivial software patents.
What does the end of the commercial rights mean for online retailers and what are the advantages and disadvantages of using a one click solution?
Roger Niederer, Head Merchant Services SIX Payment Services, outlines his Reality Checks below.
Check 1: The patent expires worldwide
Amazon CEO Jeff Bezos filed the patent with the US Patent Office for an online purchase with one click together with three colleagues on 12 September 1997. The patent protection will expire in the USA on 11 September 2017. The patent was criticized heavily and an objection was filed against the protective right, as critics described the function as so trivial that no patent would be granted. Despite the objections Amazon was granted a patent in the USA. This means that online merchants can expect changes in the payments landscape.
Check 2: Apart from Amazon, no one has ever used the 1-Click function
Owning the patent meant that other companies had previously had to pay a license fee to Amazon to use the technology. The US online bookstore Barnes & Nobles was not prepared to pay for a license and in 2002 a US judge issued a preliminary injunction against the company and was ordered to stop selling products with a single click. The company then had to install an intermediate ‘second click’ step within its order and payment process.
Apple, on the other hand, licensed the 1-Click patent to use the functionality in its AppStore. It is not known how much Apple paid for the license but in 2000, Steve Jobs, the late Apple CEO, said: "Licensing Amazon.com's 1-Click patent and trademark will allow us to offer our customers an even simpler and faster online buying experience." It is not known if other companies are paying license fees to Amazon.
Check 3: The expirations will have a positive effect on e-commerce
Lesley Paone, one of the founders of the US e-commerce platform Thirty Bees, discussed the expiration of the patent in a blog post. He noted that "The e-commerce world will change forever." With the expiration of the patent, the virtual checkout will be much easier in the many online shops of US merchants. It is therefore to be expected that many US providers will soon offer one click payment methods - and will certainly extend this to their customers in Europe if they operate internationally. Therefore, at the very least, suppliers should also respond in order to not be technologically disadvantaged. Given that Christmas, which is always a peak time for retailers, is approaching, they should strive to integrate a one click facility into their online stores. Support for a fast and fully-integrated implementation can be provided by partners who already offer the corresponding tokens.
Conclusion: Fast, convenient payment methods are a must-have
Time consuming check-out processes can lead to abandoned payments. The one click technology stores customer information with the help of cookies, so that they cannot be re-stored again on the next order, but can be used automatically on subsequent purchases. This simplifies the purchase process and provides a smooth and efficient customer experience. While some German retailers already have this solution as part of their service, others must now consider whether they want to take advantage of the benefits of the technology.
With a strong payment services provider at their side, which provides a corresponding token, merchants can easily and quickly integrate this method of purchasing into existing processes and systems.
It should be noted, however, that Amazon still owns the trademark to the name "1-Click", therefore similar functionalities will have to have a different name and some simple terms are forbidden in some languages. European merchants need not be afraid of the grow in one-click capabilities of online shops in the USA but harness the potential of the technology, compete on a level playing field and transform their online offering.
Head PR & Internal Communications
SIX Payment Services
+43 1 71701 6524
Media Relations SIX
T: +41 58 399 2129
SIX Payment Services
SIX Payment Services offers financial institutions and merchants secure, innovative services along the entire value chain of cashless payments. Our tailor-made solutions include settlement of domestic and international payments by credit, debit and prepaid card. One of Europe’s largest card transaction processors and market leader in Switzerland, Austria and Luxembourg, SIX Payment Services ensures that card-based payments in Switzerland and abroad are both accepted and processed.
With around 1,100 employees and 10 locations worldwide, SIX Payment Services supports clients in 33 different countries. www.six-payment-services.com
SIX operates the infrastructure underpinning the Swiss financial sector and offers a comprehensive range of services around the world in the fields of securities trading and settlement, financial information and payment transactions. The company is owned by its users (approximately 130 banks of various orientation and size). Its workforce of over 4,000 employees and presence in 25 countries throughout the world generated operating income of CHF 1.8 billion and a Group net profit of CHF 221,1 million in 2016.