Amazon's New Payment Plans: PayPal Plunderers or Posers? By Michelle Megna
July 31, 2008
Amazon just announced the release of two new payment services designed for small online businesses. Checkout by Amazon and Amazon Simple Pay are designed to let shoppers complete purchases on e-tailer sites using the same information they have in their Amazon.com account.
Reaction to the news is mixed, with some industry watchers saying the services will significantly increase competition with heavy-hitters in the sector, while others argue that they will merely become PayPal wannabes.
Two New Payment Services for Small Web Shop Owners
The company is touting Checkout by Amazon as a complete e-commerce checkout solution that provides small business customers a secure and trusted checkout experience. It supports Amazon 1-Click, and includes tools e-tailers can use to manage shipping charges, sales tax, promotions and post-sale activities such as refunds, cancellations and chargebacks.
The second service, Amazon Simple Pay, is a set of payment-only products that allow a small merchant's customers to use payment information from their Amazon.com account as a payment method on the merchant's Web site.
Key features of Amazon Checkout, according to the company, are as follows:
Ease of use for Amazon customers: Customers can use the information from their Amazon.com account and other Web sites powered by Amazon.com to complete purchases on your Web site without having to re-enter their shipping address or payment information.
Familiar checkout experience: Checkout by Amazon provides the familiar checkout experience available on Amazon.com today on your Web site.
1-Click ordering: Checkout by Amazon can identify Amazon.com customers shopping on your Web site and offer them Amazon's 1-Click experience. This allows customers to place orders instantly without leaving your Web site.
Cart up-sell: Checkout by Amazon is designed to enable you to up-sell your products within the checkout pipeline. You also have the option to earn Amazon.com Associate commissions for up-selling Amazon products during checkout.
Reduced bad debt: Amazon's fraud detection capabilities, chargeback controls, and risk management processes reduce bad debt.
Shipping rates and sales tax: Checkout by Amazon provides real-time shipping and sales tax calculation when customers place orders. It provides tools to easily configure the shipping and sales tax rates.
Promotions: Checkout by Amazon provides tools to create and offer customized promotions to your customers.
Purchase protection for your customers: Customers have the same protection under the Amazon A-to-z Guarantee that they have when they shop on Amazon.com.
Order management: Checkout by Amazon provides tools to view, edit, settle, and cancel orders, search orders by date, download orders in a text file, and print shipping labels and packing slips.
It's designed to work seamlessly with Fulfillment by Amazon: Checkout by Amazon combined with Fulfillment by Amazon (FBA) enables you to outsource both transaction processing and fulfillment.
Co-branded payment pages: You can co-brand the checkout pipeline hosted by Amazon Payments with your own logo.
Fees are assessed on a per-transaction basis and vary depending on the transaction amount. They are based on a percentage of the transaction amount plus a per transaction fee and are detailed at the Amazon Checkout FAQ page.
In terms of setting up the new payment system, Amazon says it's as simple as cutting and pasting code on your site, and offers links to step-by-step guides and tutorials, also found at the company Web site.
A Simple Plan: The Light Version
For e-tailers who don't need as many features, there's Amazon Simple Pay. Unlike Checkout by Amazon, it does not provide capabilities to support real-time shipping and tax calculation, promotions and order management-tasks including order cancellations, order reports and shipment tracking. However, merchants can use Amazon Simple Pay to enable payments, donations and marketplace transactions.
There are three tiers of service. Amazon Simple Pay Standard enables merchants to offer Amazon Payments as a stand-alone payment method or have it integrated into an existing checkout experience. The second plan, Amazon Simple Pay Donations, is designed for U.S.-based, nonprofit organizations to collect donations using Amazon Payments.
The third plan, Amazon Simple Pay Marketplace, says the company, makes it easy to facilitate payments between buyers and sellers, and to charge a fee for the transaction. If you are an e-commerce solution provider, a shopping cart provider, or a marketplace application developer, this is the easiest way for you to facilitate payments between buyers and sellers, according to Amazon.
Like Checkout by Amazon, there are no start-up charges, monthly charges or long-term contracts associated with Amazon Simple Pay, but fees are assessed on a per-transaction basis. For pricing and setup details, visit the Simple Pay overview page.
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