Amazon Launches Competitor to PayPal

01 August 2008

SEATTLE: Amazon has launched a new online payment system – Checkout by Amazon – offering fellow internet retailers a similar service to that on its own portal, a venture seen as a potential rival to eBay's long-time market leader PayPal.

Traders taking up the new offering will have the option of letting the web giant manage their payments, and will also be able to use customer details – such as billing details and addresses – from Amazon if customers are registered on both sites.

A major benefit of the service is said to be Amazon's ‘one-click purchase' facility, claimed to be simpler than PayPal's system which requires buyers to re-key their details on a different website.

A simplified version of the new system, called Amazon Simple Pay, will also be available, and is seen as more directly competing with PayPal.

Mark Stabingas, vp of Amazon payments, said: “Customers will be coming through an experience that is really similar to Amazon's. People will like the familiarity and comfort associated with that.”

Forrester analyst Victoria Bracewell Lewis furthered: “Any potential loss in brand equity as a result of presenting Amazon as a payment option would I think be outweighed by the increased revenue potential.”

eBay paid $1.5 billion (€961m; £757m) for PayPal in 2002, and it is now responsible for over 25% of the company's revenues. Google Checkout, which was introduced two years ago, has failed thus far to dent its hold on the market.

Data sourced from The Times (UK); additional content by WARC staff