Amazon land a blow against PayPal and co

As I've been talking about the internet this week, it's noteworthy
that Amazon have just launched two new simple payments services.

Checkout by Amazon
allows you to take all the payments functionality that Amazon offer
–auto calculation of payment, shipping and taxes, promotion codes,
customer feedback reviews – and place these on your own website.

Amazon Simple Pay allows internet shoppers to use their Amazon payment details on your website, without the additional functionality. 

In doing this, Amazon are leveraging their 1-Click* payment method to other non-Amazon websites.

For those unfamiliar with the 1-Click service, it is a method for
Amazon customers to keep all their payments information – credit card,
address, name and password – in their Amazon account. Therefore, when
it comes to ordering, you just click and it’s paid. No need to enter
the card and billing information because it is all stored in your
Amazon account.

And all of these services build upon Amazon’s Flexible Payment Services, launched last year.

With the launch of these services yesterday, Amazon extend their offers
significantly, with the aim of becoming the choice host for e-commerce
payment services outsourcing. In other words, as an online retailer,
rather than using PayPal or Google Checkout, use Amazon.

This is where it gets really interesting therefore, when you compare pricing models.

Amazon's costs for the new services are quite high at 2.9% plus $0.30¢
for every transaction of $10 or less, rising to 5% plus $0.05¢ for
every transaction over $10. Volume discounts also kick in.

That’s an interesting pricing model as, amazingly, PayPal
charge 2.9% plus $0.30¢ for every transaction. However, PayPal do not
differentiate between high value versus low value payment pricing but
only offer bulk discounts.

Mind you, Google Checkout is free!
For every $1 spent on Google advertising, merchants can process $10 in
sales for nothing. Alternatively, if you don't use Google adwords or
don't spend enough on advertising, the charges are a lot lower at 1.5%
plus $0.30¢ per transaction.

Let the battles begin.

* Bankers may also like to note that 1-Click is available on the mobile phone too!