Amazon launch Flexible Payments Service

No primary category set

Amazon Web ServicesIt’s been rumoured all week, and now it’s official: Amazon have announced the launch of their new Flexible Payments Service. FPS is now in “limited beta”: I’d better say up front that possibilities for those outside the US are currently pretty limited, but nonetheless, this looks like a very interesting product.

“Designed from the ground up specifically for developers”, Amazon Flexible Payments is designed to be a platform upon which individual payment solutions can be built. Buyers use the same login and payment information which they would use on the Amazon site, which should allow the convenience of stored payment information at the same time as offering the security of the Amazon brand. FPS accepts payments through balance transfers within its own system, transfers from bank accounts, and credit cards. Reflecting the different fees charged to Amazon, merchants’ fee structure for each payment type is different: bank transfers are cheaper than credit cards, and balance transfers are cheaper still. Transactions under US$10 have their own fee structure, and a low fixed cost of $0.05 even makes micropayments look like a sensible possibility. For those who want to accept lots of very small payments, these can be aggregated over time to reduce processing fees. There is no set-up or monthly charge for using FPS.

One interesting aspect of FPS is that developers can specify that they take a cut of each transaction: I can imagine a time when ecommerce developers are paid not with an up-front fixed fee, but with a cut of every transaction that goes through a website that they’ve made.

So what does all this mean for eBay sellers? Well… nothing yet. Amazon FPS isn’t a payment method in itself: unlike Paypal, Nochex or even Google Checkout, you can’t just sign up and start taking payments. Nevertheless, it seems inevitable that a payment solution for eBay would be one of the first applications someone would develop. As eBay are still refusing to allow Google Checkout on the site, it seems likely we’ll see a ban on FPS-based applications fairly shortly – and equally likely that, with rates in many cases much lower than Paypal’s – sellers will fight to be allowed to use those applications. Watch this space: we live in interesting times.

Many thanks to Ina Steiner for the heads-up.

6 Responses

  1. Sue, I think eBay allows Amazon’s payment service on eBay when Amazon begins accepting PayPal on Amazon. I would guess it will be a cold day before that happens.

  2. Seriously though Randy I think Amazon have greater potential to penetrate the market than Google. Average Joe on the street has an eBay/PayPal account and has bought books/music from Amazon. They still have an AOL account (or one from whichever ISP they signed up with…) and have only used Google for search.

    What’s easier? Use your PayPal or Amazon account that you already have or sign up for Google? Amazon should get more momentum quicker and overtake Google by Christmas

  3. Chris, I certainly agree that Google is the company that should be worried. They don’t have a built in base of users. I think Christmas is a little soon because the Amazon service is still in Beta but I do agree Google needs to be worried.


Amazon 2023 Stats and Performance

Amazon 2023 Stats and Performance

Amazon funded Quantity Discounts by Amazon

Amazon funded Quantity Discounts by Amazon

Pile ou Face success in lost package lucky dips

Pile ou Face success in lost package lucky dips

Sophie Slade Hunswick, Content Director from Amazon consulting agency Sitruna

Mastering the Amazon: Navigating the Currents of E-comm Logistics

Amazon Business in Europe

New Amazon Business ‘Prefer Small and Medium Enterprises’ feature

ChannelX Guide...

Featured in this article from the ChannelX Guide – companies that can help you grow and manage your business.

Register for Newsletter

Receive 5 newsletters per week

Gain access to all research

Be notified of upcoming events and webinars