Amazon’s new Online Payments Launch Steps up Competition with PayPal

Electronic commerce (e-commerce) giant Amazon is stepping up its competition with rival eBay’s online payments services PayPal, by managing subscription payments for start-ups and other companies.

The new service, launched earlier this week, follows several months of testing by Amazon with the Canada-based wireless service provider Ting, which launched in February 2012. It allows Amazon’s 244m active users to use credit card details stored on Amazon.com to pay for services such as a monthly phone bill or a digital music subscription. Amazon then charges a fee on each transaction.

The move follows last month’s launch by PayPal of a new marketing initiative to promote its capabilities in mobile payments and money transfers. PayPal has around 148m active accounts. The new service broadens Amazon’s profitable role as a middleman for third-party sellers, which accounts for 40% of its sales and extends its influence beyond the website.

It also comes ahead of Amazon chief executive (CEO) Jeff Bezos’ official launch on 18 June of what is widely expected to be a 3-D smartphone that will be key to expanding Amazon’s role in mobile payments.

“You should see it as one of many things that we’ll do to expand where people might think about Amazon helping them,” said Amazon vice president of seller services, Tom Taylor, in an interview.

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