I was interested in the announcement of the Amazon Flexible Payment Service; I browsed their documentation on the couch on Sunday night.
I haven’t gotten through it all yet, but at first glance this seems like it’s going to suffer from the same big problem as Google Checkout — it’s only available in the United States, which is not going to cut it for most internet businesses (even if that business happens to be based in the U.S.). Of the thousands of Approver.com users we’ve signed up in the past year, maybe a third seem to be located outside the U.S. and about 10-15% of our paid users are outside the U.S (we think).
I’d be embarrassed to turn away international customers by pulling the plug on PayPal. Doing an online payment system is hard, but getting the banking systems of 160 countries around the world to let you do a payment system is much harder, so I don’t imagine that either Google or Amazon will catch up to PayPal in this area anytime soon. But if Amazon were able to get the EU, Japan and Brazil covered it would go a long way toward making me feel warm and fuzzy about adopting their payment system.
Amazon’s pricing seems comparable to PayPal (2.5% of the transaction plus US$0.30 for transactions over US$10 with special pricing for "microtransactions" so you could do something similar to what PayPal does with iTunes).
Support for recurring payments is handy (we use PayPal’s comparable feature, which they call "subscriptions," on Approver.com today). The ability to co-brand the payment page is also vital for us (and again, PayPal also has this feature).
It *appears* as if you can kick off the payment flow with a SOAP or REST web service API call, something that PayPal has never permitted. I haven’t tried this myself yet but if it works as advertised, this is what Amazon is talking about when they call their service "flexible". In contrast, PayPal flows can only be initiated using a HTML form, which is an enormous pain in the ass for a variety of reasons (particularly so with ASP.NET because of the way it takes over standard HTML form functionality).
The big disruptive thing I see here is the ability to create payment flows where you are neither the sender nor the receiver of money, you’re just facilitating the transaction. This would give you the ability to create marketplace applications (a feature that PayPal doesn’t facilitate for obvious reasons). Unfortunately this feature doesn’t make sense to for us since Approver.com is not a marketplace of documents; I’m not sure it’s going to make a thousand marketplaces bloom, but you never know.