Unlike merchant-oriented services such as eBay's PayPal or Google Checkout, FPS is intended for software developers.
"It's the first payment service built from the ground up for developers," said Adam Selipsky, VP of Product Management and Developer Relations. "It's a Web service. What that allows us to do is build-in all sorts of flexibility that traditionally has not been possible with payment solutions."
That flexibility takes the form of being able to program any kind of payment instructions, conditions and constraints that either the sender of the money or the recipient of the money wants to impose on the transaction.
"That can be things like 'allow my kid to make no more than 10 transactions this month and no more than a total of $25, and by the way, have all payment ability expire on October 21,'" said Selipsky.
FPS can be used to specify transaction amounts, transaction dates, spending limits, recipients, payment methods, and fees. And because FPS supports payment aggregation, it can be used to process micro-payments as a single transaction. Typically, micro-payments aren't profitable because fees assessed per transaction exceed the payment amount.
The programmatic nature of FPS becomes critical for computer-to-computer micro-payments, which need to be massively scalable. "For example, you might have a Web portal with restaurant reviews, stock information, and traffic reports," said Selipsky. "The way it might get those traffic reports would be to consume them from a third-party, real-time traffic service provider. And every time the consumer comes to the Web portal to get an updated, real-time traffic report, the portal would make a Web services call out to the traffic service provider and bring in the latest information for the consumer. Maybe the portal would then pay the traffic service provider a penny or a tenth of a penny for that transaction. And that might be happening many times in a single second or minute."
Such scenarios promise to change the nature of online mashups, which typically consume data without payment, at least until the popularity of a service forces the mashup maker and data providers into a negotiation. Suddenly, software developers have a way to automate the buying and selling of data using a familiar Web services infrastructure.
A few of the online businesses that plan to use FPS include Buxfer.com, a peer-to-peer payment system for settling debts between friends, Freshbooks.com, a small business bill service, and Jungle Disk, an online personal backup system.
FPS promises to make Amazon's "muck" -- the term Amazon CEO Jeff Bezos uses to describe the pay-by-the-drink e-commerce and computing infrastructure that has been assembled under the Amazon Web Services brand -- easier to swim in. When online buyers "make a payment at an FPS-enabled site, it's essentially zero-friction," said Selipsky. "They can use their Amazon.com login credentials, their existing Amazon.com payment methods. It's a very hassle-free way for anyone with an Amazon.com account to transact."
Amazon Web Services includes the S3 storage service, the EC2 computing cloud, and the ECS e-commerce service, among others.
While FPS will likely lag behind PayPal for some time, it could soon challenge Google Checkout because doing business with FPS-enabled sites wouldn't be much of a stretch for the 69 million active Amazon customers who already do business there. That's because FPS transactions will look at lot like Amazon transactions.
"We have people's user names, passwords, and credit card information," explained Selipsky. "Amazon has worked hard to build up trust in securely maintaining that information."
However, co-branding is an option and unlike some payment systems, FPS can return customers to the merchant's site for "up-selling" or "cross-selling" before the transaction is completed.
Building A Mobile Business MindsetAmong 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps – and it's past time for those with no plans to get cracking.
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