Amazon Thinks Payment Outside the Box

Publié le 14 août 2007 par Reuters

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Online retailer Amazon has opened up its payment system to third-party Website operators in a bid to compete with PayPal and Google Checkout. On August 3, Amazon launched a trial of a new service, Amazon Flexible Payment Service (FPS), which is designed for independent online retailers.

Amazon FPS provides Website developers and operators with application programming interfaces that link their sites to Amazon's own payment system. The service is provided through Amazon Web Services, a new subsidiary which allows start-ups as well as established businesses to rent Amazon's computing and other Web services on demand.

Amazon customers will be able to use their Amazon.com passwords and their payment information stored on Amazon’s database to pay for goods and services ordered on third-party Web sites. There will be no need for them to log on first at Amazon.com before making a payment on a third-party site.

Amazon FPS gives third-party Website operators the option of accepting credit card payments, receiving transfers direct from the customer’s bank account, or of using the Amazon Payments balance transfer service. This service transfers money from one Amazon Payments account to another Amazon Payments account. Amazon says its has the ability to aggregate micro-payments into a single transaction.

For transactions over US$10, Amazon FPS charges retailers a 1.5 percent fee plus US$0.01 for Amazon Payments balance transfers. For bank account debits, the fee is 2.0 percent plus US$0.05. For credit cards, the fee is 2.9 percent plus US$0.30.

Aite Group analyst Adil Moussa says the new service will challenge PayPal and Google Checkout. “But Amazon may find it difficult converting PayPal users, in particular,” he says in a report. “They are a loyal group.”

Moussa warns that PayPal will not remain dormant, if Amazon FPS’ features prove to be effective. “I foresee PayPal offering the same services very quickly in the near future,” he says.