Amazon is outsourcing more of its Web-scale software. Yesterday, it beefed up its payment services with the launch of Checkout by Amazon and Amazon Simple Pay. Other e-commerce sites can basically insert an Amazon Checkout cart on their sites and Amazon’s software will handle one-click ordering for anyone with an existing amazon account, order management, shipping and sales tax calculations, and other features. Or with Amazon Simple Pay, customers can just remotely sign into their Amazon accounts and Amazon will handle the payment process itself.

For both services, Amazon charges a transaction fee that starts at 2.9 percent of the order amount, plus 30 cents per order (it goes down to 1.9 percent for sites doing more than $100,000 a month in sales). And for transactions less than $10, Amazon charges 5 percent plus 5 cents.

Amazon already offers an array of payment services for both consumers and businesses, including a Flexible Payments Web service for developers to build their own checkout experiences for themselves. Hints of these latest additions came out in June. Checkout and Simple Pay are aimed squarely at businesses who may not have the resources or time to build their own payment service using Amazon’s Flexible Payment Services API. Amazon is going after PayPal and Google Checkout by leveraging its own payment software (and the millions of existing accounts tied to its system) and making it available to others.

Amazon is making big strides towards building cloud computing services, from payments to storage to compute cycles. If it can succeed in creating meaningful revenues from these services, they should be higher-margin businesses than shipping books and CDs. (In a related move today, Amazon is simplifying its Mechanical Turk Web service so that non-coders (i.e., business managers) can set up tasks they want to automatically farm out to digital workers across the world.

When I last covered payment service provider Payoneer, the company had announced the collection of $3 million more in funding and the addition of iStockPhoto to its client roster. Today, the company is announcing the initial rollout of “Payoneer Virtual US Account,” a new offering that simplifies payment cash out for international payees.

The new offering allows Payoneer card holders that live outside the US to receive direct Automated Clearing House (ACH) deposits/payments without the necessity of actually having a US bank account.

Here’s how it works: Payoneer maintains a bulk of sub-accounts under its main account, which is held in an American bank. When an ACH transfer is initiated, each of these sub-accounts is referenced using its own routing and account numbers. When the funds are credited to one of these sub-accounts, Payoneer loads the funds to the associated card.

Contrary to their name, these accounts are not virtual at all. Payoneer’s thinking here is to call them virtual accounts because they only serve as channels for loading money onto their cards. The accounts cannot be used for wire transfers, they don’t bear interest, etc. I may be splitting hairs, but the name could be a bit snazzier.

The Payoneer Virtual US Account might not seem all that exciting to some, but I assure you, this is a huge deal if you are an international payee. Take the following scenario as a case-in-point:

Let’s say you’re an affiliate marketer living in Russia and you’ve just had your monthly commission deposited to your PayPal account. With Payoneer, it works like this now: you can perform an ACH transfer directly from your PayPal account to your Payoneer Virtual US Account. The funds will be immediately available on your Payoneer Debit MasterCard balance, ready for cash withdrawal from an ATM in Moscow, or available for charge at any MasterCard point-of-sale station (department stores, supermarkets, etc.).

Payoneer’s Virtual US Account program is still in pilot mode and only available to a select group of cardholders, for whom Payoneer can accurately verify the source and destination of funds.

While the program is clearly valuable to international payees, things are a bit stickier with the PayPals, LinkShares and iStockPhotos of the world whose “blessing” is necessary for the program to take off. The crux of their concern is a fear of issues related to money laundering compliance. They would prefer to avoid the matter completely rather than risk getting themselves into hot water. Their “blessing” is necessary because they may already (or can easily in the future) update their terms and conditions to stipulate that ACH transfer to payees from certain countries are barred.

The fact that Payoneer’s systems and methodologies are designed to deal head-on with international compliance issues should help it on this front. If Payoneer has been given the green-light to broaden its offering to include Virtual US Accounts, it has probably handled compliance issues to the satisfaction of its bank, which must have kept a particularly close eye on it from day one.

Many, if not most, Internet startups focus on the American market and its users. Often times this leaves international users without the access to products and services that US users find common-place. So it’s good to see a company like Payoneer simplify payments and cash outs for international payees. It might not be easy, but the rewards could be substantial.

Barrons is all breathless about Amazon getting ready to step up its game in the payments arena. Eric Savits writes:

Cantor Fitzgerald analyst Derek Brown asserts in a research note this afternoon that Amazon “may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay’s crown jewel.” Brown says that Amazon could launch such a service as soon as late summer or early fall of this year.

But wait. Amazon already competes with eBay’s PayPal. It’s called Amazon Payments and it lets you:

—send money to anyone’s email address or mobile phone.
—make online purchases at other participating Websites
—buy Amazon products using your mobile phone.

It launched the current version of Amazon Payments last year. Also, last year Amazon launched its Flexible Payment Service as a Web service in limited beta so that developers could integrate Amazon’s checkout into their own sites (customers use their Amazon login, and the Website gets paid by Amazon, after a fee).

The article notes that both of these services exist, but does not explain how Amazon could go beyond their current offerings. So it is not exactly clear what further steps Amazon will take to beef up its current Amazon Payments service into a full-fledged competitor to PayPal. In terms of functionality, it is already pretty close. It even looks the same as PayPal. (Click on screen shot above).

Even if it does push the service harder, Amazon won’t find it easy to displace PayPal, which is deeply entrenched as one of the preferred payment mechanisms on the Web. But competition does keep everyone honest. So good luck to Amazon.

Here’s one for the conspiracy theorists: It turns out that Google App Engine, their new platform for building and hosting third party web applications, is blocking applications from integrating with PayPal for payments.

Developers who are building apps that use PayPal to handle payments usually require the application to send a request to the PayPal service. The URL’s used in these requests are all on the paypal.com domain name, and there is a test environment setup on a URL at www.sandbox.paypal.com. In Google App Engine apps, requests to either of these URL’s returns a generic ‘download’ error with no specific details.

A number of developers complained in a Google App Engine forum discussing the issue (also on Hacker News), where they also found a way to bypass the restriction by using a third-party proxy (like TinyURL). Then, early this morning, a Google employee named Marzia Niccolai wrote a comment, saying that the error was caused by their anti-phishing protections:

Thanks for the report! This is a bug, and we have located the problem. There was an error in our anti-phishing protections that was blocking some specific URL domains from being fetched using the URLFetch service. This was an oversight on our part, and these specific domain restrictions will be removed in the next few days.

Normally something like this wouldn’t raise too many eyebrows. But there’s too much bad blood between Google and eBay not to question this, and Google’s anti-phishing blacklist does not, of course, list the paypal.com domain as a phishing site.

Most developers who have commented on this so far strongly believe that this was a deliberate block by Google. So far, we can only take Google at their word that blocking Paypal was an accident because of the way their anti-phishing rules work. But with so many phishing sites involving Paypal, you would think that when implementing their rules they would at least check that the real Paypal site still works. Besides, the Google.com phishing test shows that Paypal is considered a safe site.

Why would it be different for App Engine? To make things more suspicious, that phishing test tool was launched last month.

We have emailed Google for a comment and will be updating this post as news comes in.

Update: In the post we mentioned that some developers were using a third-party server and/or domain to proxy requests to PayPal. It turns out that even those proxy requests no longer work (they did at some point), leaving one of the developers on that thread to conclude ‘I guess they are blocking PayPal at their (Google’s) gateway..’.

The Google Checkout/Ebay Paypal wars continue.

Ebay Australia currently allows merchants to accept credit cards, direct debit, money orders and checks for purchases, but from June 17 they want to allow only PayPal or cash on delivery. When the Australian Competition & Consumer Commission (ACCC) asked for public comments on the proposal a lot of of people responded. But an anonymous 38 page document that is highly critical of Ebay’s move was submitted on May 26, leading to speculation on who the author might be.

It turns out, the title of the document, hidden in the PDF metadata, gave a very good clue “Microsoft Word – 204481916_1_ACCC Submission by Google re eBay Public _2_.DOC.” An Australian named David Bromage first discovered it.

The document is still available on the ACCC’s website (and is embedded below), with the title stripped out. But the Australian newspapers are all over this now.

Google’s competing product to eBay, Google Checkout, is only available to merchants in the US and UK, so they don’t directly compete yet with PayPal in the Australian market. Apparently, that hasn’t stopped them from trying to keep their options there open.

In the document, Google says Ebay’s actions are anti-competitive, that the public benefits claimed by Ebay are “illusory” and that the proposal will result in significant public detriment. They also request that the ACCC ban Ebay from the action under the Australian Trade Practices Act.

Will eBay retaliate? Last year they temporarily pulled all Ebay advertising on Google after they announced a Google Checkout party at an Ebay event. If they get that mad over a party, I can’t imagine how they’ll respond to this 38 page treatise on the evils of PayPal.

The full document is below. And in other news, PayPal was finally able to fix that drop down menu bug that plagued users for over ten days and was ignored until the press and blogs started to pay attention.

Google Objection To Ebay AustraliaPayPal Proposal – Find Documents

Sometime around May 16 a bug appeared in PayPal’s subscription payments page that stops people from paying if they live in a different country than the site collecting the money. The original complaint and discussion about it are here. More discussion here.

We’ve been hearing about it for a few days now, but bugs generally aren’t big news and we don’t cover them except in unusual circumstances.

Here’s what makes this different – it’s been going on for nearly ten days now, and the bug appears to be nothing more than a small issue with a drop down menu (see video above). A couple of days ago PayPal took the time to note the bug, but still no fix. People are starting to get really angry about it.

It appears that they simply aren’t storing the value of the country when a user changes it, a very simple thing to change, perhaps a single line of code. In fact, it probably took them longer to write the blog post noting the bug than it would have taken to simply fix it. The most likely explanation for the ridiculous amount of time it has taken to fix it: it’s probably stuck in a bug queue, and has to wait its turn. Meanwhile, PayPal merchants are losing money.

One merchant comment sort of says it all:

It’s staggering that PayPal has not fixed this most basic payment issue immediately. I contacted support when I received the first customer complaint about five days ago and PayPal support already knew about the error but could not provide an estimated time to fix it. Clearly PayPal cannot be relied upon to provide a stable payments system.