Amazon Launches Payment Service... Again

from the let's-try-this-again dept

As was widely expected, Amazon has now launched a new payment service for online retailers as something of a PayPal competitor. Basically, it will let people use their Amazon account info to buy things at other stores. Of course, as others have discovered, taking on PayPal -- while simple in concept -- has proven a lot more difficult in practice. Companies like Google and Yahoo have tried and haven't made much of a dent. Hell, even Amazon has tried this before, though that was a beta launch that never went very far. Actually getting retailers to implement this and then getting customers to use it is the challenge at this point, and it seems likely to be an uphill battle. There's definitely a sense that many people don't like PayPal, but it's so well established that to provide an alternative, you really need to offer something that provides significant value above and beyond Paypal -- and it's not clear that Amazon really does that.


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  1.  
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    Twinrova, Jul 30th, 2008 @ 3:53am

    Better timing for Amazon.

    I'm sure you've heard about recent eBay changes which pushes more fees to sellers while pampering buyers (giving sellers no way to fight them).

    But what you may not have heard is eBay's going into the online store direction. More and more, listings aren't about auctions, but about fixed-priced listings.

    With their Paypal backing, many feel trapped there are no alternatives while eBay makes these changes.

    Amazon's probably taken a good look at all this and have decided to try again because, as they see it, it's probably great timing for them. Many sellers have left eBay due to the recent changes and every day, eBay starts to look and act like Amazon.

    Personally, I'll back Amazon before I'll back eBay. As with most websites which get too big for their britches, it ends up falling apart due to very bad management decisions.

    I don't see eBay around in 5 years unless they do something because there's no way eBay can compete with Amazon's low prices and free shipping (on orders over $25).

     

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  2.  
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    wasnt me!, Jul 30th, 2008 @ 4:27am

    Amazon buy it self has a large customer base, with proper incentive it could gather a substantial amount of clients for its payment service. After that all it needs to do is be consistent and wait as it gathers more market share.

     

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  3.  
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    Anonymous Coward, Jul 30th, 2008 @ 6:17am

    I'll tell you right now that I don't really know beans about running a business. But in my uneducated mind, it just seems to me that it is unwise to try and penetrate a market that is already being served well. If there's a good market that is being monopolized by a lousy service provider, then it might be a worthwhile venture. But I see nothing wrong with the PayPal service at all, so it just seems like a bad idea to try and mess with what already works.

     

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  4.  
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    gordonlr, Jul 30th, 2008 @ 6:30am

    Way To Go Amazon!!!

    I'll use Amazon's payment service! Paypal's "Pay Later" scheme is just one more EASY way for scammers to use your info to get signed up in 30 seconds and ruin your finances in minutes!!!

    Paypal is a HUGE RIP-OFF and is owned by ebay. ebay/paypal is embroiled in an onslot of legal suits against them, undergoing an enormous amount of bad media coverage, giving their call center work to the Philippines, while being scrutinized concerning the way they calculate sell through rates, being watched with suspicion because of their ties to counterfeit items and Liquidity Services, while contending with major backlashes from users around the world as a result of numerous mis-steps and detrimental policy changes, while their executives shuffle their own personal ebay inc. stocks during a company buy back, while experiencing severely damaged reputations due to their defeated plan to force all Australians to accept only Paypal, in the midst of tanking stocks and an ongoing global boycott, all under the direction of a new coporate venturalist CEO with transparent visions of squashing it’s core auction base in
    exchange for an already saturated market of a new venue of fixed price items.

    GLOBALLY BOYCOTTING EBAY with members from

    France
    Singapore
    Spain
    Belgium
    Italy
    Germany
    U.K.
    Canada
    Australia
    US

     

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  5.  
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    Steve R. (profile), Jul 30th, 2008 @ 6:34am

    PayPal Sucks

    Sorry about this Mike, but I have visceral reaction to PayPal "while simple in concept". From the getgo, this concept had the appearance of an unnecessary telemarketing gimmick that adds virtually zero value. If we can use Discover, Visa, or American Express why would we need a third party intermediary to handle a cash transfer that the credit card companies already provide!?!?!?!?!?!?!?!?!

    I have really liked Amazon.com, but they seem intent on going the way of E-Bay and making "bad" business decisions to "foster" growth. While making money is fundamental to capitalism, I am consistently dismayed when companies get gimmicky to raise profit levels. I would like to see Amazon.com return to a "simple" business plan.

     

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  6.  
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    mslade, Jul 30th, 2008 @ 6:39am

    Re:

    "But I see nothing wrong with the PayPal service at all, so it just seems like a bad idea to try and mess with what already works."

    Have you used it before? PayPal's model is grossly incompetent. Their level of service is almost non-existent. I've dealt with them as an average Joe buying products through PayPal, in which they have (numerous times) told the merchant to ship my things to a 6 year old address without ever prompting me.

    I've also dealt with them as a merchant implementing their payment gateway API, where I've had to email them with critical questions such as "Why do my payment request keep timing out at 10PM - 10:30?". I email them because eBay and friends adopt the "Don't call us, and we won't call you" model of customer service... they don't want your lip, just your money. Anyhow, it took weeks -- yes, weeks -- for them to get back to me and apologize for how overwhelmed they'd been with email lately (?) and that's why the response took so long.

    Bottom line, PayPal has a monopoly but there is plenty of room for improvement and it would be delightful to see them struggling to do something about it if they were threatened.

     

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  7.  
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    Phil, Jul 30th, 2008 @ 6:54am

    PayPal Sucks?

    "If we can use Discover, Visa, or American Express why would we need a third party intermediary to handle a cash transfer that the credit card companies already provide!?!?!?!?!?!?!?!?!"

    Because what got PayPal up and running and grew it to become the behemoth that it has become is that the average Dick and Jane didn't have a clue how to accept payments from Discover, VIsa, and Amex. To do all of those you had to sign up for merchant accounts with a bank, not a simple process, and most banks won't give merchant accounts to individuals.

    What PayPal did was to provide an EASY way for Jane and Dick to accept payments for their goods and services electronically by making it an easy and guaranteed transaction for both the buyer and the seller.

    No bad checks to worry about, no merchant accounts, no giant hurdles between you and the person on the other end of your transaction.

    They became successful by doing what most successful tech companies have done: Fill a need, fill it well, be the first to do it or come in early and be the best to do it.

     

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  8.  
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    Ian Ward-Bolton, Jul 30th, 2008 @ 6:54am

    Sounds like an extended Amazon MarketPlace

    This just sounds like an extension of Amazon's MarketPlace, which I use extensively for buying books at lower prices than Amazon can offer.

    I really like Amazon as a business. They have some very clever ways of getting me to spend more money (e.g. "Other people who bought this book, also bought ..."). It's not difficult to see how non-Amazon retailers could benefit from this approach, such as when I buy a book from Amazon it tells me about a related product sold elsewhere.

     

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  9.  
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    Anonymous Cowherd, Jul 30th, 2008 @ 7:05am

    What's needed...

    What's needed is a standardized payment API, where merchants adhere to one half of an interface standard, payment providers adhere to the other, and then customers can mix and match.

    We have that in bricks-and-mortar stores, where they all take cash and they all take credit and debit cards using the standard number system for these.

    The online equivalent would need to include cryptographic handshakes, and vendors would need to be able to blacklist particular payment providers so they'd have recourse if one cheated them.

    Once such a standard was in place, payment providers could compete freely for customers without having the barrier to entry of "getting on enough merchants' web sites". Paypal would be forced to improve or die, in particular.

    Merchants probably get the screws from the likes of Paypal too, so merchants have an incentive to band together and create such a standard and use collective bargaining power to force Paypal to use it. (Or even not; they could offer this interface to would-be Paypal competitors and separately offer Paypal payment for so long as it remained in widespread use, using whatever separate interface.)

     

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  10.  
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    Steve R. (profile), Jul 30th, 2008 @ 8:17am

    Re: PayPal Sucks?

    "No bad checks to worry about, no merchant accounts, no giant hurdles between you and the person on the other end of your transaction. When the merchant fails to deliver the merchandise, under PayPal your money is gone, gone, gone.

    Also, Amazon.com seems to have "resolved" the ability of Jane and Dick to get paid. Based on a recent credit purchase that I made at Amazon.com they somehow "forward" the credit payment to the small merchant. E-bay could have implemented the same the same type of payment strategy. Unfortunately, it appears that Amazon.com seeks to emulate E-Bay's bad business model. For everyone's "protection" E-Bay could sue Amazon.com for "stealing" their business model. Maybe that will deter Amazon.com from going down this ridiculous road.

     

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  11.  
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    jonnyq, Jul 30th, 2008 @ 12:19pm

    Re: PayPal Sucks

    In response to your first paragraph there: PayPal provides a relatively simple API/interface for taking money - simpler than most clearinghouses. Also, PayPal lets people use their credit card to pay you even if you don't have a merchant account. It's a very cheap alternative to getting a real, expensive merchant account with a lot security/privacy requirements.

    If Amazon can provide that same service cheaper, simpler, and better, I'd be willing to switch.

    It's not a gimmick; credit card clearing is expensive.

     

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  12.  
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    Matt Brubeck, Jul 30th, 2008 @ 4:30pm

    Amazon FPS

    Just to clarify, Amazon Flexible Payment Service (which you linked to in the article) is still around, and still in beta. It's different from Amazon Checkout, though. Instead of a consumer-oriented solution with a web-based checkout page, it's a web service that programmers can use to build their own payment interfaces or workflows.

     

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  13.  
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    Rene Lawand, Jul 31st, 2008 @ 5:42pm

    Re: your comment

    You say "it is unwise to try and penetrate a market that is already being served well"...two comments Sam Walton, Wallmart, crushed K mart which was working well at the time. Wallmart just worked better...who says Paypal is working well. They are Ebay who are an awful company when it comes to treating their sellers. Ebay is changing and within five to ten years, they will be something different and a smart new kid on the block will win.

     

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  14.  
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    Cassandra Johnson, Aug 13th, 2008 @ 10:37pm

    eBay/Paypal are history!

    Unfortunately eBay's attempts to salvage a disgusting mess have back fired repeatly over the last twelve months. If you own stock in either one, take it from a seriously successful investor and dump them immediately. eBay is history. Their are so many negatives with regards to eBay's future that I wouldn't purchase ebay stock if it was being offered as a penny stock, it won't be worth that in a year. Its just one stupid move after the other with these clowns. Run, Run Fast and Far.

     

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  15.  
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    دردشة, Jul 8th, 2009 @ 6:36am

    They became successful by doing what most successful tech companies have done: Fill a need, fill it well, be the first to do it or come in early and be the best to do it

     

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