Jeff Barr says Amazon has 69 million active customers. On the surface, that's a smaller number than PayPal's 143 million accounts. But Amazon's just-announced Flexible Payments Service (FPS) will give PayPal a run for its money.
FPS's 250-page API allows 3rd party developers to tap into Amazon's payment processing infrastructure. It supports one-time and recurring payments via credit cards, bank account debits and Amazon Payments balance transfers.
As you'd expect, each FPS transaction has a sender and a recipient. But in addition, third party "callers" can act as an intermediary and collect a per transaction or percentage fee. For instance, you could build an MP3 marketplace where visitors pay artists directly for songs, while you receive a commission for each download. FPS also lets you aggregate $0.01 to $0.50 micro-payments into prepaid or postpaid batches to save on processing fees.
But there's more to FPS than more-flexible-than-PayPal features and lower rates. Amazon has a great deal of knowledge on each of its 69 million customers: what items they've searched for/viewed/purchased, what's on their wish lists, what they've sold on Amazon's marketplace... If Amazon makes even the tiniest bit of aggregated data available through FPS, it'd be tough to justify using any other payment processing service.
So FPS already powers Amazon Webstore (where merchants pay a monthly fee plus a percentage commission on each sale), which Amazon sent me a free trial offer for because its system noticed that I once bought an ecommerce-related book. Can you see how neatly all the pieces fit together?
Last week Ray Ozzie presented his vision for a 3-layered Microsoft cloud. S3/EC2/SQS are Jeff Bezos' answers to Ozzie's virtualized utility computing fabric and application framework, while Amazon Payments, FPS and Clickriver accomplish some of Ozzie's goals for Microsoft's Live Platform Services, which include identity management, data/features sharing across multiple apps and audience monetization.
Sun CTO Greg Papadopoulos once said the world needs only five "hyperscale, pan-global broadband computing services giants". When I first read his post, I thought of his "Big Computers" as super-high-volume providers of bandwidth, storage space and computing power. But it seems each of The Five will have to be a powerhouse in the framework and application layers as well.
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