Amazon to expand their payment system to compete with PayPal?

[mouser]

We here have actually been using Amazon's Honor System to accept donations for quite some time, and they charge very reasonable fees.  So i'm looking forward to this.

Look for a launch announcement by Amazon this week or next of a new web service around payments, adding to their S3 (storage), EC2 (virtual server) and other services. They’ve been quietly testing the service, which will compete with PayPal and Google Checkout, for a few weeks.

http://www.techcrunch.com/2007/08/01/amazon-to-launch-payments-services-will-compete-with-paypal-and-google-checkout/

[ljbirns]

mouser

I'm Confused .

We here have actually been using Amazon's Honor System to accept donations for quite some time, and they charge very reasonable fees.  So i'm looking forward to this.

The link says :LTERNATIVE DONATION METHODS


Amazon Honor System

DONATE USING
AMAZON.COM

If you choose to donate using Amazon.com, you'll have to remember to click the "Send Info" button after you donate, or email us yourself with your Amazon.com "Order Summary ID#", in order for us to activate your membership, since Amazon.com donations are anonymous and we have no other way of knowing who the donation has come from; Amazon.com also takes a larger portion of your donation from us as a surcharge for using their service (and requires you to create an amazon.com account before you can donate), so we'd recommend and prefer that you used PayPal.com if you can.


Lew

[mouser]

i should clarify:
99% of our donations come from paypal.  I have been using paypal for many years and am *extremely* fond of it.

having said that, amazon.com honor system is our backup method, and while not perfect it does work and is much better fee than the normal shareware services.

so, to clarify: paypal is 100x better for us than the amazon.com honor system, but the amazon honor system is still good, and to the extent that the new amazon system can improve on it, it could be a viable alternative.

[mouser]

Official announcement, it's in beta:

http://www.amazon.com/b/ref=sc_fe_c_1_3435361_1/104-9066604-5529567?ie=UTF8&node=342430011&no=3435361

[attach]

[mouser]

They are specifically allowing microdonations..

Pricing

There are no minimum fees and no start-up charges to use Amazon FPS. In addition, use of the Amazon FPS Sandbox is free of charge.

Fees are assessed on a per-transaction basis and vary depending on the payment method used and the transaction amount:
For Transactions >= $10:

    * 1.5% + $0.01 for Amazon Payments balance transfers
    * 2.0% + $0.05 for bank account debits
    * 2.9% + $0.30 for credit card

For Transactions < $10:

    * 1.5% + $0.01 for Amazon Payments balance transfers
    * 2.0% + $0.05 for bank account debits
    * 5.0% + $0.05 for credit card

For Amazon Payments balance transfers < $0.05:

    * 20% of the transaction amount, with a minimum fee of $0.0025

Qualified developers can apply for the following monthly volume discounts for credit card transactions:

    * 2.5% + $0.30 per transaction for payment volume from $3K- $10K
    * 2.2% + $0.30 per transaction for payment volume from $10K - $100K
    * 1.9% + $0.30 per transaction for payment volume over $100K

[mouser]

Compare that fee struture with paypal, the cheapest reliable alternative:

Monthly Sales Price Per Transaction
$0.00 USD-$3,000.00 USD 2.9% + $0.30 USD
$3,000.01 USD-$10,000.00 USD 2.5% + $0.30 USD
$10,000.01 USD-$100,000.00 USD 2.2% + $0.30 USD
> $100,000.00 USD 1.9% + $0.30 USD

[mouser]

so it looks like they copied paypal for the most common datapoint (2.9% plus 30 cents).
but they added more friendly micro-payment rates for < $10 payments, which is somewhat exciting.

Commissions they take from a $2 payment break down like this:
Amazon = 10 cents + 5 cents = $0.15
Paypal = 30 cents + 5.8 cents = $0.36

[mouser]

More relevant text:

Developers are free to set up an unlimited number of payment instructions. This makes it possible, for example, to have a different set of payment instructions for each counterparty with which you do business.

Developers can create payment instructions that are as simple or complex as they desire.  For example, creating a relatively complex business model around micro-payments is easy to do with Amazon FPS. Our aggregation feature lets you track and aggregate micro-payments into a single payment transaction, saving on transaction processing costs and avoiding having to build complex ledger functionality into your own applications.  Without this capability micro-payments would be difficult or cost-prohibitive.

Micro-Payments Support: With Amazon FPS you can track and aggregate micro-payments (e.g. payments less than $0.50 or even $0.01) into a single payment transaction and can charge the customer before (prepaid) or after (postpaid) the service is provided. This features lets you minimize transaction processing costs and avoid having to build complex ledger functionality into your applications.

Aggregate micro-transactions into a single larger transaction using Prepaid and Postpaid capabilities.

If it seems like i'm getting a bit excited about this new service from amazon.com it's because I am.  Amazon.com has always felt to me like they are serious about their web services, and interested in building things right.

[mouser]

long discussion of it:
http://www.freshbooks.com/blog/2007/08/03/amazon-flexible-payment-service/