One might wonder why an online seller would need yet another online payment method with all the services currently out there, but offering customers a way to pay that is convenient and comfortable to them can help increase conversion rates. Blogger Michael Arrington wrote on his TechCrunch blog on Wednesday that Amazon.com is about to announce its own online payment service, and indeed, some are likely wondering why they haven't already.

A source at an ecommerce-management provider said he couldn't specifically comment about what he might know about an Amazon payment service since he has signed non-disclosure agreements, but he said it was "a logical place for Amazon to go." He believes such a service would be more likely to hurt PayPal than Google Checkout.

Online seller Zu Ahmed, who sells on eBay and Amazon.com as well as her own site (http://www.blingaddict.com), said she didn't see the appeal of yet another payment service. She also didn't see the logic of such a move, since it wouldn't be used on its own marketplace: Amazon processes all transactions for sellers, taking money from the buyer, and forwarding payments to sellers weekly or bi-monthly.

But processing those payments between buyers and sellers gives Amazon rich data that helps it keep down incidents of fraud. If Amazon could extend its seller chargeback protection in a service she could use on her own website, that would be a big advantage over PayPal and Google Checkout, Zu said.

PayPal already recognizes the value of transaction data in reducing fraud, calling it Advanced Risk Predictors. In June, it announced it will begin testing a Web Service that utilizes advanced risk predictors, giving merchants more information and control over whether to accept payments, while maintaining buyer privacy. The Web Service will fully rollout in 2008.

An Amazon.com spokesperson contacted on Wednesday said, "We do not comment on rumors or speculation."

http://tinyurl.com/33mlwl