LOS ANGELES Amazon.com has opened its payment
system to other Web sites in a move that would pit it against
The program, called Amazon Flexible Payment Service, was
launched on Friday in an initial testing period, Amazon said on
Customers of Amazon.com, the largest internet retailer in
the world, can already purchase goods through third-party
sellers. Now, software developers operating their own Web sites
can choose to use Amazon's payment system.
The payment system operates under the umbrella of Amazon
Web Services, a relatively new division of the online retailer
that allows start-ups as well as established businesses to rent
Amazon's computing and other Web services on demand.
Amazon customers use their Amazon.com passwords and payment
information on file to pay for goods and services ordered on
these third-party Web sites -- even if they access these sites
without first going on Amazon.com.
Stifel Nicolaus analyst Scott Devitt wrote in a note
published on Monday that he anticipates alternative payments to
be one of the most active areas in the online retail sector for
the next several years.
The Amazon service competes with PayPal and beyond, he
"In the long term, we believe that the card companies and
certain categories in the traditional retail channel have the
most to fear about the activities by technology-driven online
innovation," Devitt wrote.
Deutsche Bank analyst Jeetil Patel wrote in a note
published on Sunday that Amazon's pricing model on bank debit
transactions has a lower markup than PayPal.
The new program will allow Amazon to attract and retain new
customers, while better understanding consumer purchasing
behaviour for future marketing opportunities, Patel wrote.
The program allows third parties flexibility, with the
capability to send and receive money using credit cards, bank
accounts or an Amazon Payments balance transfer, with Amazon
receiving a fee for every transaction.
Amazon shares rose $2.20 to $79.00 during regular trade on