July 18, 2003 11:07 AM PDT

Amazon: Shop elsewhere, pay at our site

Amazon.com has detailed plans to release a test version of an online payment system that would allow people to use their Amazon accounts to pay for products bought from other Web-based businesses.

The online retailer said it will launch the beta version of its payment system in a newsletter sent to partners regarding its Web services efforts. The system will "allow visitors to your site to use their Amazon account to pay you for any product or service," the Seattle-based company told its partners in the newsletter.

In addition, the system will allow online vendors to offer controlled access to Web content and transaction verification status. It will be delivered to partners through a basic application program interface (API).

The Amazon service appears to fulfill a similar function to PayPal, the popular online payment system acquired last year by Internet auction giant eBay. However, analysts have said a payment system could allow Amazon to expand its reach among consumers.

"They might have trouble competing with PayPal, since it is so ubiquitous," Aaron McPherson, a research manager IDC, said. "But when you consider the opportunity it creates for Amazon to expand its reach, to offer a wider selection of out-of-print books or music titles, you can see the potential. Basically there would be fewer instances where consumers couldn't find something they were looking for via Amazon."

The system would also allow the company to derive additional benefits from the e-commerce software architecture it built for its own site, McPherson said.

It already lets some third-party retailers to embed its shopping-cart technology in their sites, via an existing Web services tool. The system offers direct access to Amazon's product catalog, as well as the opportunity to build paths to the data stored there. The API-based tool is part of Amazon's associates program, which rewards retailers that refer sales to Amazon with a slice of related profits.

 

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