Friday, August 03, 2007

Amazon Payment Service Is Official!

I wrote a couple of days ago, about the rumored Amazon payment system. Well, according to Ina Steiner of Auctionbytes, the system is now official.

I have to say, I like the direction the Amazon system is headed but I have reservations about it being a major PayPal killer. As long as PayPal is not accepted on Amazon, then Amazon's payment system won't be accepted on eBay, therefore you will have two ecommerce giants with their own payment systems. eBay's market is much bigger than Amazons.

The actual battle is much more likely to be held outside of either marketplace. I do think that PayPal will act quickly to combat the threat, perceived or real. This new threat of competition should benefit sellers using PayPal. Also, PayPal will have to get real aggressive with their off eBay business. I think this may marginalize Google Checkout because Amazon's system reportedly will act like PayPal, allowing for a user to maintain a balance in their Amazon payments account and transfer money directly rather than using a credit card. Google checkout is essentially an e-wallet for credit cards.

I am also very intrigued by the Micro-payment aspects of the planned service. This will be very beneficial to Amazon as they move more aggressively into digital sales and help them manage cost in their competition with Apple's iTunes.

Right now management at eBay's PayPal and Google's Checkout are in their respective war rooms, planning the next move. Ok, maybe not but they are at least discussing it at lunch.

Update: Here is a first hand account from a developer who had an early look at Amazon's payment system.

No comments: