Amazon Payment Systems Take On PayPal

Bridger writes "Amazon has introduced two new payment systems for merchants and consumers, which brings it into a market dominated by PayPal. Google introduced a similar system for merchants and consumers in 2006, also called Checkout, but it has not found favor with online retailers. Auction giant eBay, which owns PayPal, has prevented consumers from using the Google system."

Comments

ecash / opencoin

[jbaach]

Hopefully someone will implement ecash again, e.g. opencoin.org, and will provide some more interesting payment features for the users.

Same Song, Different Verse

[Khakionion]

Auction giant eBay, which owns PayPal, has prevented consumers from using the Google system.

So, thank goodness Amazon has released a system, so that eBay will not use it too.

Re:Same Song, Different Verse

[biocute]

Google doesn't have anything to sell, but not so for Amazon, it doesn't need eBay users to survive, Amazon has enough users to get this thing started.

Re:Same Song, Different Verse

[erikina]

In all fairness I don't think either (Google's or Amazon's) attempt was designed as a full blown competitor to paypal. Which is a shame.

I personally would want something like a cross between paypal and e-gold. Buyer beware (no freezing and locking accounts, which only effects legitimate sellers). But without the whole gold thing.

It's the age of e-commerce, why still can't I send money easily/cheaply?

Re:Same Song, Different Verse

[vux984]

It has a lot of advantage when dealing with people you don't want to provide any permanent credentials, such as when buying something from an unknown individual or donating money to some organization, group, or charity.

Visa, at least, and probably the other cards by now, have a system where you can generate a single use credit card number pre authorized for specific merchant and dollar amount. So you can use that numbe in an online transaction and the merchant gets a number that's only valid for that single use single dollar amount. If it gets stolen, no big deal. If the merchant tries to double bill it, no dice. etc etc. And I trust Visa a lot more than Paypal.

I don't hate paypal, but I do dislike using it given all the limitations, fees, and scams. I also despise the ebay/paypal pairing.

As for egold... yeah total scam... it had potential...maybe something like it still does.

But I think the real juggernauts -- the banks -- still have to weigh in on this.

My bank recently introduced "Interac Email Money Transfer" and its pretty freaking impressive. I can send money to nearly anyone in Canada with a Canadian bank account, and an email address. We don't need to share bank information or personal information at all. All I need to know as the sender is the recipients email address -- any email address, they can even use a throw-away one as long as they can pick up email on it, and I don't need to know what bank they belong to as long as its participating in the Interac Email system which is currently the 5 major Canadian banks (TD, RBC, Scotia, CIBC, and BMO).

The price is a flat $1.50 per transaction, which is pretty steep to pay for a $10.00 ebay win... but a drop in the bucket when paying for a $500 transaction. There is no fee to receive money.

If they don't use one of the 5 participating banks, but have an account at, for example, a credit union, they can -still- receive money, but I think it gets redirected through a more complicated and time consuming inter-bank transfer, and there is a fee charged to the recipient.

For me this is the paypal killer. Not only is it secure convenient and trustworthy but banks and credit unions, at least in Canada are pretty customer service oriented...toll free 24-hour hot-lines, and genuinely useful staff are the norm in my experience with TD, RBC, and Scotiabank. Contrast that with Paypal. :)

Already for me, anything significant is now done via this interac system when I can. Once it expands to the credit unions and/or goes international... I think paypal and its cohorts will be reduced to competing for petty cash transactions and micropayments, e.g. sending sums like... $1 or $5, where the $1.50 fee is just too much.

but I wouldn't be surprised to see the interac system evolve and start offering 'plans' in addition to the a la cart flat fee.

For details check it out...

http://www.interac.ca/consumers/productsandservices_ol_emt.php ... not sure if something like this is in the states yet...

Re:Same Song, Different Verse

[Threni]

> I personally would want something like a cross between paypal

I'd be interested in a cross between paypal and something good, which is supported by people who give a shit about their customers and don't just send stock replies to users who are complaining about getting only stock replies. I've stopped using eBay because of it too, although it looks like I got out just in time - by all accounts it's much more dodgy to buy/sell stuff on there these days.

Re:Same Song, Different Verse

[Lord Haw Haw Haw]

In India we have something called NEFT (http://www.rbi.org.in/Scripts/FAQView.aspx?Id=60). you can send money to any bank on the RBI grid (currently in 15 odd cities) account using the banks internet portal. Though u do need to know the receiver's bank account and branch. This transfer is free to both the sender and reciever. (tho there is a daily cap on the amount of money u can transfer)

Re:Same Song, Different Verse

[msisden]

I just used CIBC's Interac Email Money Transfer system, and it was a pain in the ass. Having to pick a security question that the recipient has to answer? Ok, I can kinda sorta understand that. However, their are draconian limitations on what can be entered. Length limitation when trying to come up with your own question? That certainly helps me come up with something unique that the person would know. Only allowing letters, numbers and hyphens in the answer? Even more annoying! Why can't I used spaces and punctuation? As a concept it is ok, and for all I know other participating banks don't have CIBC's limitations, but from my user experience it was more frustrating than it needed to be.

I, for one, welcome our new checkout overlord.

[AdamInParadise]

As someone who had the dubious task of integrating the Paypal payment mechanism into a custom checkout process, I welcome this new "Checkout by Amazon" with open arms.

Re:I, for one, welcome our new checkout overlord.

[sporkme]

It is just a competitor to paypal-ebay. If it works, they compete. If it works well, congratulations, they contend. If it flops, it has a lot of company. It is imperative that the government keeps it filthy mitts off.

Re:I, for one, welcome our new checkout overlord.

[mpcooke3]

I totally agree, we just integrated with paypal uk. My complaints are many. Firstly it isn't 1 system it's actually 3 different systems and depending what you want to do you may need to use multiple systems. Also some systems have multiple APIs, none of this is clearly documented, nor is it clearly documented what Cards do not work with the different systems.

Despite claims that it works with most payment cards, the paypal system we were recommended to use won't accept American Express and will only accept newer Maestro cards if you give them an imaginary start date and pre-convert the currency to GBP (we process in dollars).

It's a total joke.

The support service involves ringing a special business helpline that will only work if you ring from a pre-authorised telphone and pretend to be the person who originally signed up for the service and even then if you press the wrong option the support involves getting read out the contents of an online help page.
When you finally do get through to support and you ask them a question, they basically don't even know themselves what will work.

Re:I, for one, welcome our new checkout overlord.

[VdG]

I think a competitor to PayPal would be a good thing, but I disagree about the government(s) keeping out of it. PayPal and any other similar service need to be under similar regulation to other financial services, to provide reasonable consumer protection - something PayPal have tried to avoid. There have been numerous complaints in this area over the years and it's one of the main things which has kept me from getting a PayPal account.

Re:Illegal?

[nacturation]

Am I naive or doesn't that violate some kind of consumer rights?

The consumer's right is that they can shop elsewhere.
 

Re:Illegal?

[DrEldarion]

It's a load of crap, and Australia has already called bullshit on them for trying to make eBay Paypal-only: http://arstechnica.com/news.ars/post/20080612-australia-calls-shenanigans-on-ebay-paypal-only-policy.html

This is *very* good news

[bangzilla]

As someone who has had the misfortune to try to resolve an eBay non-delivery issue with Paypal (never got back to me and then closed the request for support) I'm happy that there will be alternatives to PayPal. Paypal's customer service is *horrible* -- in comparison Amazon's customer service is one of, if not the, best in the world. Good news too is that Amazon already has my information (and millions of other people's) so anyone using the new service doesn't have the huge task of trying to convince buyers to sign up -- they are already signed up with a service they already trust.

Re:Google Payments / Checkout could work if ...

[enkidu]

Expanding a payments service to other countries is not as simple as writing code: government permits need to be obtained; legal entities created, certified and approved; transaction partners identified, negotiations completed, contracts signed, accounting methods and reconciliation formats agreed upon, tested and verified. Auditors need to be chosen, hired, audits managed. Even a company like PayPal with dozens of experienced legal and financial team members, takes more than a year to release in a new country. For companies with little or no financial institutional experience (beyond typical corporate finance that is) it is an undertaking which is several orders of magnitude more complex for a company to manage and execute than writing, testing and deploying code.

Re:Illegal?

[DRobson]

However Fred does not own Mastercard and does not have an inherent financial interest in denying Visa.

What E-Bay did that most people missed..

[Channard]

.. or at least the press missed, was forcing PayPal on people by force. Over the space of about six months, they've been requiring people to take PayPal if they had less than 100 feedback, and then if they listed in certain categories. Now they've expanded that to nearly all categories, so that if you want to list anything on E-Bay, you have to take PayPal. By that time I'd already started using Amazon, but that was the final nail in the coffin.

Subscriptions?

[pebcak]

Hopefully Amazon takes a lesson from Google. One of the problems with Google Checkout is that they don't allow subscriptions to be created. Google's transaction fees are lower than PayPal's, or my merchant account's, so I'd love to use them more heavily, but that's a major roadblock. I'm sure a lot of other small businesses are in the same situation.

Re:Is it global ?

[jyristys]

"Checkout by Amazon is currently available only for sellers in the United States." https://payments.amazon.com/sdui/sdui/business?sn=cba/faq#o_countries

This isn't about eBay... this isn't like Paypal...

[argent]

I don't use eBay, don't want to use eBay, and frankly wish I could get Paypal to quit telling me about eBay. I still have little interest in Google Checkout. I suppose I might sign up for it some time, but it's not even the same kind of business. Paypal works like a checking account, I can paypal small amounts of money around to anyone else who has a paypal account, they don't have to be set up as an online merchant, they can just take my money and spend it themselves. It's pretty much the online equivalent of cash. If Google Checkout has any comparable capabilities they're sure hiding it... for the end user all they are is another merchant service like the one Yahoo runs, but one that's tied specifically to Gmail and the other Google services. I can maybe see some convenience there but it's nothing like Paypal.

Amazonbay

[s7uar7]

Lets hope it means there's an Amazon auction site on the way too: ebay needs some proper competition.

Re:Amazonbay

[mdfst13]

Err...yes, because Amazon's last auction site worked so well. Have you noticed that eBay is becoming more like Amazon? Payments to go through eBay's payment processor (PayPal). Greater concentration on fixed price (Buy It Now). Seller based browsing. Amazon had all those things first.

Amazon already competes with eBay in online selling. Do they really need a variable price mechanism as well? It's one of those areas that scales naturally to a monopoly. Sellers want to run single auctions that maximize the buyers (more potential buyers means a higher top bid).

Auctions is actually a niche market. It works best for unique objects, where the seller does not know how much a buyer is willing to pay. One of the challenges for eBay in recent years is that many of the people who have used auctions would really prefer a fixed price setting but have had to use auctions because that was the only place they could find their product.

In far more countries than Amazon and selling through both auctions and fixed price, eBay's earnings are still lower than Amazon. Amazon would be better off launching in a new country (e.g. India or Australia) rather than trying to invade the auction market.

The reason for Checkout By Amazon is simple. Amazon is moving to a model where people can pick and choose what Amazon services to use in selling their product. There's the Amazon Advantage program, where the product is in Amazon's warehouse, discoverable on Amazon's site, paid for through Amazon's checkout system, and shipped by Amazon (possibly bundled with other items). However, if people prefer, they can purchase those services separately:

1. Store in Amazon's warehouse and ship with Amazon's discounts.

2. Discovery through Amazon's sites (if they don't use Amazon's checkout, they can't have a detail page but can still purchase a link from Amazon to their site that appears in search results and on other detail pages).

3. Pay through Amazon's payment processor. Amazon already had Simple Pay. It used to be called the Honor System. Checkout by Amazon is new only in that one couldn't use it separately previously but had to list the item on Amazon's site.

Amazon is also different from eBay in that it offers listing on defined pages where all listings of a certain product are on the same page. This is the reverse of the auctions model, where every listing is essentially its own product. Discovery is expensive and hard. Payment is straight forward by comparison. As such, if you want to see an eBay competitor, you should look for a company that is competitive in search rather than in payment. Amazon currently does not have that kind of search, and it would be expensive for them to develop it (with no guarantee of success, see A9, where years of development failed to produce results).

Re:Amazonbay

[cliffski]

In economic terms, auctions are more efficient. Auctions ensure that people pay the value to them of the product, and that the seller gets the correct price from the market.

If I price a good at $10, and nobody wants to buy it, I sell none, nobody enjoys the product, and I am none the wiser as to the value of the product, other than I know its under $10 (or it may be due to their being zero demand).
An auction makes the *real* value and price of the product immediately apparent to both parties, and allows it to vary over time to capture markets that otherwise would not be satisfied. Rather than suffering from understock or overstock, the price automatically adjusts so that all products get sold, and every slice of the market gets access to the product.