Amazon's Flexible Payment System
Jeff Barr, Amazon's Web Services evangelist and Phil Burns are both people I'm friends with on Twitter, so I was interested to follow an exchange between them last night when Jeff kept promising his "Twitter friends" that "the announcement" was almost ready. What announcement?
Yesterday in a long blog post giving the history of AWS and it's features, Jeff spilled the beans about Amazon Flexible Payments, Amazon's newest Web service. Essentially, Amazon has taken their world class payment system and made it available as a Web service. As Jeff says:
We've taken all that we know about dealing with credit cards, bank accounts, fraud checking and customer service and wrapped it all up into one convenient package.
In much the same way that S3 and EC2 allow developers to forget about leasing space in data centers, buying servers and negotiating for bandwidth, FPS shields developers from many of the messy and complex issues which arise when dealing with money. Once again, we take care of the "muck" and developers get to focus on being innovative and creative.
FPS gives developers a rules engine for controlling how payments are handled so that "you can create one-time or recurring transactions, transactions limited by date, by amount, or even by a list of authorized senders or recipients. You can even aggregate a slew of micro-payments into a single large transaction that's of a reasonable size for credit card or other payment processing."
Speaking as someone who's had some experience building and running Internet payment systems (my group at Excite@Home was responsible for building the SurePay gateway for First Data Corp in 2000) I see this as a big win for eCommerce. These issues aren't easy and the traditional payment processors, in classic Clayton Christensen style, have failed to provide the innovative services the Internet demands. They want payment processing on the Internet to look just like it always has in the physical world.
FPS is in limited beta, but fully functional. There's a sandbox where developers can test and experiment. True to form, charges are on a per-transaction basis--no startup fees or monthly minimums. I'm anxious to see what people do with this.