Activity in Online Payment Services

Quite a bit of news around online payment processing in the last few days. In my opinion, the high level of activity and competition in the sector is very healthy and underscores the attractive fundamentals of alternative online payments. So here is what the 'PayPal killers' have been up to lately.

Amazon (AMZN)  re-launches yet another attempt at online payments called, unsurprisingly, Amazon Payments. It seems like another iteration of the Amazon Flexible Payment Service they launched a year ago which, unfortunately, has not found very much support. Hopefully this rejuvenated new launch will be better received although I'm still not sure how they plan on convincing top online retailers to display an Amazon logo at checkout.

Google Checkout (GOOG) has been relatively quiet lately. Perhaps this has caused some to speculate it is being discontinued. I think this is completely unfounded. Google Checkout, despite its intermittent problems, is building a solid customer base and will eventually follow Amazon's lead to re-package and re-launch.

Revolution Money, another online payment outfit launched last year, has finally launched its money transfer tool for AOL Instant Messenger. However, the functionality requires the download of a plug-in, which is a relative non-starter. Hopefully its just an intermediate step to having the tool fully integrated in the next official version of AIM.

Bill Me Later has partnered with Universal Air Travel Plan to start targeting airlines as potential customers. We've seen PayPal take an early lead in this sector so its no surprise to see competition follow suit. The airline sector continues to be a massive opportunity for all payment service providers given how much of their volume is now transacted online.

Comments

[Matt Fausey:]

What the world wants in an online payment service is amazingly simple and obvious to me, yet nobody seems willing to provide it. This is it:
1) A customer simply wants to purchase something online. He/she has credit card in hand and doesn't want a GMail account, or a PayPal account, or anything else. The customer simply wants to pay for something -- quick and simple.
2) The seller wants an easy way to create/place "Buy Now" buttons on a website (PayPal and Google Checkout do this well).
3) The seller is willing to pay a reasonable fee to the online payment service. Google Checkout and PayPal are reasonable.
4) The seller wants easy access to sales revenue. (Google Checkout and PayPal are very good in this respect.)
5) The seller wants the ability to issue refunds in a reasonable timeframe without extra charges.

Google Checkout and PayPal fail horribly with #1. The first one to "unlink" payment processing from that "other crap" will be the big winner -- unless somebody else comes along and excels on all points first...

2008 Jul 30 10:52 AM