There are already a lot of major, well established players in the online payments market, with PayPal being one of the most widely used services. Over the past few years Amazon has really diversified its business by pushing into tablet and set-top box manufacturing and it may even be launching a smartphone soon. The company is adding mobile payments under its belt as well. It is launching a service today which will let users pay for recurring subscriptions and other online purchases.
Reuters reports that Amazon is going to manage subscription payments for companies, including start-ups. Basically it would allow over 240 million active users with credit cards on file to pay for subscription services or even a monthly phone bill. Amazon would charge a fee on each transaction.
This isn’t Amazon’s first step into mobile payments though. Back in 2007 it launched a service called Payments, which was found to be used by almost 40 percent of all participants in a recent survey conducted by IDC. But by allowing users to pay for recurring subscriptions and bills Amazon truly has a chance to get a leg up on its competitors, which include eBay-owned PayPal.
The obvious advantage for users is that they wouldn’t have to hand out their credit card details to every other online company. If that particular company accepts payments through Amazon, users will be more likely to try it out as long as they’re assured that the information isn’t leaving Amazon.