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Amazon adds Login and Pay with Amazon service to challenge PayPal

Up to this point, eBay’s PayPal has dominated the Web payments arena. The company, which was founded by two entrepreneurs in the 1990s and which quickly grew to become the go-to payment system for eBay auctions, is now one of the largest money movers in the world. Many have come to challenge it, but few have made much of a dent. Now Amazon is making a try and may have the backing and technology to do it.

Amazon has had a log-in service for a little while, mostly in testing, but publicly available for those who wanted to try it. That service works like Google, Twitter, and Facebook logins wherein the user can use their Amazon credentials to log into other sites on the Web (those that support the Amazon login). Now, as an extension of that, Amazon is going where only Google Wallet has gone before and is allowing users to make purchases through the Amazon system on sites which support that as well.

Called Login and Pay with Amazon, the service was announced early this month at Money 2020. It works by linking the user’s login credentials and their Amazon billing account together so that merchants that implement both on their sites can collect payments from users into their own Amazon accounts.

Up to now, the only way to do this was to list products for sale on Amazon itself, then direct users there to purchase. This allows merchants to have products on their own website but use the Amazon system to collect payments. This can be for virtually any sort of product or service, much like PayPal does, and adds the extra layer of security through Amazon login services.

Like PayPal, it can be used alongside other options like merchant accounts (for VISA, MC, etc) and even PayPal. With more than 215 million active customer accounts at Amazon, this may be the one rival that can create real competition for PayPal.

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