Amazon.com took its Flexible Payment Services (FPS) one step further on Monday, announcing Amazon Pay Now "widgets." Anyone can now use a simple HTML interface to accept Amazon Payments on their site, either alone or with other payment options. Merchants can place Amazon Pay Now buttons on product pages on their own ecommerce websites and can easily integrate Amazon Payments into their shopping carts and checkout pages.

The new widgets are based on Amazon FPS, launched in August, which allows developers to integrate their applications with Amazon's payment-processing capabilities (http://www.auctionbytes.com/cab/abn/y07/m08/i03/s00). With the introduction of Amazon Pay Now widgets, merchants don't need to have a knowledge of programming. Sellers simply sign up for an Amazon Payments Business Account and add HMTL code to their website.

Like Google Checkout, Amazon's new service is not a stored payment service like PayPal. However, consumers can fund their Amazon Pay Now purchases with their Amazon Payments account balance as well as with credit cards.

The fees for Amazon's online payment service are competitive but are structured with more complexity than its competitors. Fees depend on an item's selling price and the method of funding (bank account, US credit card, international credit card, or Amazon Payments stored funds). Amazon also gives volume discounts for credit card transactions. So, for example, the fee for selling an item priced at $10 or more and paid for with a US credit card would be 2.9% plus 30 cents per transaction. That rate could drop as low as 1.9% plus 30 cents per transaction for sellers who maintain a monthly volume of $100,000 or more in credit card transactions over a consecutive 3 month period.

To compare rates, Google Checkout charges merchants 2% plus 20 cents per transaction (it's actually free through February 1, 2008), and PayPal charges merchants 2.9% plus 30 cents per transaction for monthly volumes of up to $3,000, with volume discounts dropping fees as low as 1.9% plus 30 cents per transaction.

Online bookseller Steve Weber wrote of the new Pay Now widgets on his blog on Wednesday. "It sure beats sending customers to Marketplace, where you pay the 15 percent commission or (even worse) the customer decides to buy from a competing seller" (http://weberbooks.com/selling/selling.htm). The main difference, of course, is that merchants don't need their own website (along with the marketing efforts that entails) to sell on Amazon Marketplace.

There hasn't been this much competition for online payment services that could be used by small online sellers in a long time: two major entities - Citibank and Yahoo - shut their payment services in 2003 and 2005, respectively. BidPay, now owned by CyberSource, also lets merchants accept credit card payments on their sites and is cheaper than PayPal in most cases (2.19% plus $0.25 per transaction). Interestingly, BidPay is the only one of the three PayPal competitors mentioned above that eBay sellers are allowed to advertise in their listings.

Other competitors include European-based services such as MoneyBookers and NoChex (services that are also allowed on eBay). See AuctionBytes chart of online payment services (http://auctionbytes.com/cgi-bin/charts/chart.pl?Online_Payment_Services).

It's been a busy week for Amazon.com in the payments department. The company announced on Wednesday it is making an equity investment in Bill Me Later Inc. and has signed an agreement to make the Bill Me Later payment option available on the Amazon marketplace (http://www.auctionbytes.com/cab/abn/y07/m12/i12/s02).