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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."
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.
OMG! Wau!
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.
Nobox: Only simple products.
Am I naive or doesn't that violate some kind of consumer rights?
The consumer's right is that they can shop elsewhere.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
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
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.
Rich people are eccentric. Poor people are strange. Me, I'd be happy with odd.
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.
There is no trap so deadly as the trap you set for yourself
-Raymond Chandler, The Long Goodbye
.. 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.
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.
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).