Watch Out PayPal, Amazon Gets Serious About Payments

By Josh Catone
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Last August Amazon launched their Flexible Payment System that allowed startups to take money using Amazon’s back end. At the time it was hailed as a PayPal competitor, and on some levels, it was — it was a merchant account replacement that could be co-branded and allow developers to take payments from their web site. However, it was far from a simple payment product. When it launched, Amazon’s Jeff Barr warned that using FPS wasn’t for the faint of heart. “Designed specifically for developers, the ‘F’ in FPS shouldn’t be taken lightly,” he said. “This is a very rich service — the API document is over 250 pages long.”

Today, Amazon expanded their payments offerings with the launch of Simple Pay and Checkout. Both are available through Amazon’s Payments page and the new services are aimed at small businesses, but don’t require nearly as much developer knowledge.

Amazon published a comparison chart of their three business offerings. The main difference between FPS, Checkout and Simple Pay is that FPS requires “advanced programming skills using APIs” to get implemented, while the others require just HTML or scripting knowledge. There are further differences between Simple Pay and Checkout as well — Checkout is the more complete product in terms of how much of your ordering process Amazon takes care of, while Simple Pay handles payments only and offers more options for consumers in terms of how they can pay.

The fee structure for each is the same and is competitive with PayPal. For payments over $10, sellers will pay 2.9% + $0.30 with volume discounts starting at $3k in sales per month, and for payments under $10 the fee is %5 + $0.05 per transaction.

The New York Times notes that many sellers may be wary of using Amazon’s payment services because they view Amazon as a competitor and don’t want the Seattle-based retail giant access to their sales data. “Many larger retailers express concern about partnering with Amazon because Amazon is one of their largest competitors and they don’t want Amazon to know their information,” Scot Wingo, CEO of ChannelAdvisor, told the New York Times. “On the other hand, eBay and PayPal aren’t going to use sales data to go source product themselves because they are not a retailer.”

But given eBay’s recent shift toward fixed-price goods, such as their broad partnership with Buy.com earlier this year, sellers may become increasingly wary of them as well.

Tell us, would you trust Amazon over or as much as PayPal to handle payments for you? Where does Google Checkout fit into this equation? Let us know in the comments.

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