The New Battle in the Online Payment Sphere: Amazon vs PayPal

Amazon has launched a service called Login and Pay with Amazon which allows partner sites to enable a Pay with Amazon payment button that can process purchases through the Amazon system. This competes directly with PayPal and merchant services and could become a serious competitor for eBay’s payment processing giant. It’s also something that could give Amazon a third income arm to augment the warehousing sales and cloud services it has built its business on.

The new Login and Pay with Amazon combines the current Amazon payments services with a new login service similar to Google or Twitter login systems for websites. Together, the combined services offer a one-stop integration for Web payments in a way similar to how PayPal’s payments button works.

This will allow Amazon’s business partners to tap into the 215 million active customer accounts that the company has on tap. According to Tom Taylor, Vice President, Amazon Payments, ‘Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login.’

Until now, Amazon payments services have directed users to Amazon’s website to authorize the purchase – if you’ve invested in Kickstarter projects, you’ve no doubt seen this in action. This new setup works the same way, but doesn’t require the site redirect and can work in a window or directly on the merchant’s site.

On top of the payments option, this new login service also means that websites can accept Amazon credentials as a login, in the same way they use Facebook, Twitter or Google login authentication. This opens up possibilities for a whole cottage industry of services working in and around Amazon’s consumer offerings like streaming video, audio, etc. Since it works through a simple oAuth implementation, developers will have no difficulty adding it to a site. Amazon’s inclusion of their A to Z Guarantee for this authentication service will only bolster consumer confidence.

For those who travel, you’ll see the new Login and Pay with Amazon in action when you use Gogo WiFi in flight on an air flight later this year – the company plans to have it implemented before the big holiday season of flying begins next month.

For its part, PayPal is not sitting on its laurels waiting to be ousted from the market. The company recently acquired BrainTree, a cross-site payments solution, and has unveiled a physical payment option that can be used in brick-and-mortar retail establishments to pay for goods and services. This would allow small businesses to accept payments via PayPal by having their phone or register bill the client or the client can pay and their phone will produce a QR code that the clerk at the register can scan to complete the transaction. A random four-number code can also be produced which can then be entered into the keypad of the credit card reader at the register to complete the sale.

Still, with Amazon now horning in on their core business, PayPal must be worried. Amazon, meanwhile, is poised to take yet another big chunk of the Web’s profit potential and add it to their portfolio.

The New Revolution In Electronic Payments In the Cloud

While some people might have issues with the service, PayPal should be credited with one major innovation: it enabled the e-commerce revolution almost single-handedly. Those of us who were around before it existed remember how difficult it was to get a merchant account and begin accepting payments online. Now, anyone with a few minutes’ time and a valid bank account can set up a PayPal account and begin accepting online payments almost immediately. With a few more, simple (and free) checks, they can start accepting credit cards too. A person can literally go from no online presence to having a fully functioning website with a shopping cart that accepts payments in just a few hours. Compare that to the weeks we would spend doing the same thing just a decade or so ago.

Although PayPal is still the number one way that most small Web businesses receive credit card and e-check payments online, that’s beginning to change. Other services meant to rival PayPal and promote eBay’s rivals (eBay owns PayPal as of the mid-1990s) began to appear, but haven’t really caught on with nearly the market proliferation PayPal enjoys.

That’s changing now thanks to a combined (though separate) effort by sometime-rivals Google and Apple.

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Google Wins on Two Fronts, but Can’t Oust PayPal

Some interesting statistics were released this week from New Relic and Statcounter. Both are companies well-respected in online data collecting and reporting in their respective fields. While the studies were separate from one another, when considered together, they make for interesting reading.

=== Wait, Who’s New Relic and What’s a Statcounter?

New Relic is a web application performance management company that monitors 38 billion transactions daily for some of the biggest clientele on the Web. If you recognized names like Nike, Groupon and Zynga, then you’ll be interested to know that all of them have New Relic in common. For this study, NR focused on 21,000 Web applications for their findings. Continue reading