The Amazon Flexible Payments Service (Amazon FPS)

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Today Amazon AWS launched a limited public beta of Amazon FPS, the Amazon Flexible Payment Service. Amazon FPS is a payment service that is 100% focused on the needs of developers.

Traditionally, developers have been limited in how they can manage payments. If they need to charge with a certain frequency, execute a transaction at a specific time, combine many smaller payments into one single transaction or want to charge a commission on a transaction between two of their customers, they need to create their own payment infrastructure and processor relationships. This can be difficult, expensive, time-consuming, and with significant operational risks.

Amazon FPS changes the way developers can charge their customers. Using a capability called “Payment Instructions” developers can easily create the charging model that works best for them. For example, they can charge customers in small increments until their accumulated balance reaches a limit, pay a percentage of a digital transaction as a royalty, earn a commission on a marketplace transaction, or allow one customer to pay for another customer and limit their usage to a specific amount. Payment Instructions give developers the flexibility to build multiple charging models that exactly meet their needs.

Another important way in which Amazon FPS helps developers build effective charging models is by lowering the cost of transactions wherever possible. Amazon FPS is exposing a different fee structure for different payment methods (credit card, bank account or Amazon Payments balance) and if the actual cost to process a payment through a method is less, then Amazon FPS passes these savings on to the developer. Secondly Amazon FPS’s aggregation feature lets developers track and aggregate micro-payments into a single payment transaction, saving on transaction processing costs and avoiding having to build complex ledger functionality into their own applications. Using the aggregation functionality coupled with the lower Amazon FPS fees, developers can now pursue micro-payments businesses that previously have been cost-prohibitive.

The Flexible Payment Service integrates with the Amazon Payments operation such that Amazon customers can use the same login credentials and payment information they’ve already entered on to pay for any developer’s service that uses Amazon FPS. This helps Amazon customers keep their payment information secure while exploring new services and its helps developers by removing the typical friction associated with making a first-time or repeat purchase. More details for Amazon

More information at the Amazon FPS detail page and at Amazon Payments Information pages.

Also more background at the AWS weblog.