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Auctionbytes-NewsFlash, Number 1592 - August 03, 2007 - ISSN 1539-5065      | Next Story

Amazon Launches Online Payment Service - for Developers
By Ina Steiner
AuctionBytes.com
August 03, 2007
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Amazon.com announced its online payment service that was rumored to be coming soon, and it's a web service aimed at letting developers create applications that utilize the payment service. The company said Flexible Payments Service (Amazon FPS) is in limited beta and "is the first payments service designed from the ground up specifically for developers. The set of web services APIs allows the movement of money between any two entities, humans or computers. It is built on top of Amazon's reliable and scalable payment infrastructure."

Amazon.com said the service provides utmost flexibility and is a low-cost solution. It is ideal for enabling micro-payments, making sales of digital content more cost-effective. ("You can even aggregate a slew of micro-payments into a single large transaction that's of a reasonable size for credit card or other payment processing," according to Amazon.com.) FPS charges less when the actual cost to process a payment is lower, rather than charging the same fixed fee for all payment methods. There is no up-front investment or monthly payment for running an application using the service.

Developers will likely question whether eBay will allow applications using the payment service to be used on its site. eBay still bans Google's Checkout service, which is over a year old. Amazon said it has 69 million active customers and has been processing payments since 1995, making a strong case for having a "substantial historical track record of providing safe and reliable financial and/or banking related services," as required by eBay.

Amazon FPS service is different from Google Checkout in that it can be set up to send and receive money using not only credit cards, but also bank accounts or Amazon Payments balance transfer as payment methods.

Every FPS transaction has a sender (party making payments), a recipient (party receiving payments), and a caller (party making the API calls to Amazon FPS). Callers are the same as recipients if the developer is the party receiving funds, but developers can also act as third-party callers enabling a transaction between a sender and a recipient (and taking a cut of transactions if desired).

Each party to a transaction might want the flexibility to place conditions or rules around that transaction (such as "allow only five transactions or $50 per month," or "refuse payment after August 1").

According to a blog post on the Amazon Web Services blog, "We've taken all that we know about dealing with credit cards, bank accounts, fraud checking and customer service and wrapped it all up into one convenient package. In much the same way that S3 and EC2 allow developers to forget about leasing space in data centers, buying servers and negotiating for bandwidth, FPS shields developers from many of the messy and complex issues which arise when dealing with money. Once again, we take care of the "muck" and developers get to focus on being innovative and creative." (http://aws.typepad.com/aws/2007/08/pay-me-now-or-p.html)

http://www.amazon.com/gp/browse.html?node=342430011

See AuctionBytes blog post, "Amazon's New Payment Service Will Spark Innovation": http://tinyurl.com/22tw32


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