The service, which launches on Monday, allows the company's more
than 240 million active users to use credit card details stored on
Amazon.com to pay for services such as a monthly phone bill or a
digital music subscription. Amazon then charges a fee on each
EBay Inc's PayPal has long dominated online payments services but
Amazon sees plenty of scope to push into new areas.
The new service broadens Amazon's profitable role as a middleman for
third-party sellers, which account for 40 percent of its sales and
extends its influence beyond its website.
It also comes ahead of June 18 unveiling by Chief Executive Jeff
Bezos of what is widely expected to be a smartphone key to expanding
Amazon's role in mobile payments.
"You should see it as one of many things that we'll do to expand
where people might think about Amazon helping them," Amazon vice
president of seller services Tom Taylor said in an interview.
Amazon has been testing the new service over the last several months
with start-ups including Ting, a mobile phone company that is part
of Tucows Inc. Those who used recurring payments by Amazon spent 30
percent more on Ting's website, product manager Justen Burdette said
in an interview arranged by Amazon.
Some analysts have said Amazon has been held back in payments
because merchants are wary of handing over customer data to the
company, which has a record of rapidly expanding into new areas and
competing with sellers.
But Taylor said the only details collected by Amazon as part of the
new service is the dollar amount of each transaction and not any
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He added that the service would encourage Amazon users who might
otherwise be leery of handing over their credit card details to a
fledgling companies to try out them out.
"If you think about giving a merchant that you may not know very
well the right to continue to charge your credit card in the future,
you really want to know that a good relationship with Amazon stands
behind that," Taylor said.
"We hope whoever the next Spotify out there is thinking about
Amazon," he added, referring to the privately held, popular digital
music subscription service.
(Reporting by Deepa Seetharaman; Editing by Edwina Gibbs)
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