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August 3, 2007

Amazon Flexible Payments Service Launches

Michael Arrington

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As predicted, Amazon launched a new payments web service today called Amazon Flexible Payments Service, or FPS. It will compete with Paypal and Google Checkout.

FPS, Amazon says, “is the first payments service designed from the ground up specifically for developers” and “unmatched flexibility in how they can structure payment instructions.” Payments can be made by credit cards, bank account debits, and Amazon Payments balance transfers.

The most important feature: people can pay using the same login credentials and payment information they already have on file with Amazon. That means people don’t need to have their credit card and other personal information stored at yet more ecommerce sites. For payments over $10, Amazon will charge 2.9% + $0.30. This matches PayPal but is higher than Google, which is eating fees to gain market share (Google charges 2% + $0.20).

This may quickly become Amazon’s most popular, and most profitable, web service. Anyone can now leverage their tens of millions of customers and provide a very simple payment option.

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  1. cbmeeks

    August 3rd, 2007 at 5:16 pm

    WOOHOO!!

    Amazon picked me as a beta tester! WOOHOO!!

    Of course, they probably picked 80,000 others too…lol

    cbmeeks
    http://www.signaldev.com

  2. Jason Alba

    August 3rd, 2007 at 5:20 pm

    I read about this earlier today on the Amazon Web Services blog…. it made me wonder if I should accept payments via PayPal, Google, this new Amazon service, and a traditional merchant account service… it’s all about the customer, right? Then I could have Google fanatics and Amazon fanatics and PayPal fanatics choose their favorite.

    I contrast this to the various options with credit cards… if I go to store to check out I have no preference on whether I use a Discover or Master Card or American Express or my Visa… actually, I’ve always favored my Visa, but if I had to use MC it was no big deal (no skin of my nose, and no inconvenience).

    The difference is that if I am a heavy Amazon user, then I’ll feel most comfortable there, and allowing me to pay with the info I have on my Amazon account seems like a significant benefit to me… etc. etc.

    Michael, do you think online merchants are going to (or, are going to HAVE TO) cater to these different methods?

    Jason Alba
    CEO - JibberJobber.com
    | managing the only career that matters: yours |

  3. Textbook Case

    August 3rd, 2007 at 5:21 pm

    I love Amazon. I love PayPal too, but this will just force them to improve. Amazon’s entire web services line is just great– they are truly intended to be used, as opposed to Google’s and Yahoo’s with the low limits, they are destined to be marginalized. EBay as well, although you can pay for more access.

    With Amazon it’s just so much easier, and I think they are reaping the benefits of a million people building businesses off of their platforms.

  4. bala

    August 3rd, 2007 at 5:22 pm

    with higher pricing it is hard to compete with google….paypal is losing to google on price ground…and amazon may not get the traction they needed on the same reason…it is not hard for google to develop webservices/apis if that is the differentiation with amazon

  5. Tim

    August 3rd, 2007 at 5:40 pm

    This looks really good!

    I am impressed with their efforts to support micro-payments. If someone can get this right it will have a huge impact on eCommerce.

    It looks like Amazon is motivated to get it right. We are going to seriously check out using them ourselves now.

  6. Allen Stern

    August 3rd, 2007 at 5:45 pm

    Very cool.

    #2 Jason - I had this debate with a friend a year ago when launching my consulting service. His take was that not everyone wants to use paypal and that you need another cc processor as well. I said I don’t think its that important.

    A combo of Paypal and Amazon should suffice as I don’t think there are as many haters of Amazon as there are of Paypal. Mike notes the fees for PP and A are the same - personally I would have looked to price A a bit lower so that they could talk about the pricing as part of their marketing. Now they are just “on par.”

    I think the key is to make sure your customers have what they need to make the purchase as quickly as possible.

  7. Wayne Pan

    August 3rd, 2007 at 6:05 pm

    I said it on the VW story but this service only handles US payments and in US currency. Not very useful in the global economy of today until they add i18n support imo. (Which I pray they do so use developers have more choices!)

  8. Tim

    August 3rd, 2007 at 6:19 pm

    I just spent some time looking at all of Amazon’s services and I am impressed.

  9. Nation

    August 3rd, 2007 at 6:37 pm

    I like how you can do both micro payments and normal payments with out funky coding (looking at paypal) … does google do the same?

  10. Zeta

    August 3rd, 2007 at 6:55 pm

    For Transactions

  11. Zeta

    August 3rd, 2007 at 7:00 pm

    For Transactions less than $10: 5.0% + $0.05 for credit card

    This is much better than PayPal and makes selling low cost items more economical. I’ll be definitely adding this to payment options for my customers.
    For example http://www.scoop.co.nz sells photos as postcards (printed and posted) for NZD$3. PayPal takes 16.6%. Amazon will take 7.3% only. The trouble is making customers register with yet another payments provider. PayPal has been around for a wee while now and a lot of users have an account there.

  12. Chad

    August 3rd, 2007 at 10:25 pm

    Glad I don’t work for a buxfer / billmonk, etc… this just ruined your weekend.

  13. Importer

    August 3rd, 2007 at 11:11 pm

    Can I import my Paypal-balance into Amazon..I have a good chunk of money there…

  14. Darren Stuart

    August 4th, 2007 at 12:10 am

    I think this is great, however no one seems to have mentioned the micro payments are US only. I use freshbooks and am looking forward to offering my customers this method to pay me when transfers are live for the uk.

  15. yo

    August 4th, 2007 at 1:03 am

    Very nice.

    -yo
    http://clubliveforums.com

  16. william

    August 4th, 2007 at 2:31 am

    …..Why do you need to be a developer to set up an ecommerce service ?
    You should be able to do this without an api.
    Darmik.com gives you this ability today

  17. David / Homeopathy Zone

    August 4th, 2007 at 9:06 am

    I use PayPal for online clinical work I do. Now that I found out about Google and Amazon I wonder whether I am losing any customers by not including at least one of these in addition to PayPal. I haven’t had any complaints, but perhaps those not using PayPal simply do not make contact with me?

    Does anyone here have any statistics about users who might use only Google and/or Amazon but not PayPal? Would it be wise to add one of these to PayPal (considering the extra hassle of managing another account)? If so which one? My concern is not with the variations in service charges but with convenience for my clients.

  18. beyond work

    August 4th, 2007 at 1:14 pm

    Good to see the competition between paypal, amazon and google.

    -bala
    http://beyondwork.wordpress.com

  19. Marco

    August 4th, 2007 at 4:16 pm

    Very interesting. You should mention that there is also a pre-paid version available. And as far as I know the fee for prepaid accounts is lower.

  20. David Mackey

    August 4th, 2007 at 4:24 pm

    Good to see competition. Still need a better solution for micro-payments.

  21. Chad

    August 4th, 2007 at 5:05 pm

    How much do you think amazon will benefit on the store-front side of things?

    It is probable that more of the money people receive will be used to buy stuff on amazon.
    1) It’s convenient since it’s already in amazon’s pocket
    2) you have to visit amazon in order to access it
    3) where they will shove product recommendations in your face

    In that respect, the service could monetizing greatly. This is an advantage that neither google or paypal have. Maybe google can upsell adwords, but that is only limited to the businesses using the service. Amazon can upsell to everyone, and we all know how much the buyer population out numbers the merchant population.

  22. Browse

    August 4th, 2007 at 6:54 pm

    Beats Google for web-service developers.

    Someone who uses S3 is likely to be storing customer data (and could feasibly charge a recurring fee for this). Google is not designed for recurring service payments.

    Having the ability to auto-charge my clients based on S3 usage makes FPS worth the extra $, especially since they give nice discounts for high-volume accounts.

  23. Loopforever

    August 5th, 2007 at 4:31 am

    But Not for International users yet :-(

    Just like Google Checkout still does not work with International sellers.

    But a least PayPal works here in Denmark(EU)!

    Really hope they soon make it International..

  24. Don Juan

    August 5th, 2007 at 10:41 am

    So much for http://www.paypal.com anymore, they are getting hit hard. At least they still have http://www.ebay.com

  25. Abhishek

    August 5th, 2007 at 4:47 pm

    This is an awesome addition to their armoury, which already includes the very successful S3.

    I believe they can bring more services to bear to enable start-ups deploy services faster. Here are some of my thoughts in that direction:

    http://abhishek.tiwari.com/200.....ecosystem/

  26. Jim

    August 8th, 2007 at 12:06 am

    This is good news. PayPal has become so crappy, it needs to some competition to straighten it out.

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