Amazon goes after PayPal by offering to handle payments for startups & online services

Amazon will start handling payment services for startups and other companies starting today.

The move is only the latest example of Amazon inching into eBay-owned PayPal’s territory of acting as a middleman of sorts when it comes to online payments.

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Unlike PayPal, however, Amazon doesn’t seem to be interested in setting up “bank accounts” to allow consumers to store money in order to make purchases from various businesses. Instead, Amazon will be giving select services and businesses a new way to let their customers to pay using the credit card information stored on their Amazon accounts.

Amazon already offers to handle payments for a handful of its own services, such as Woot, as well as a few it doesn’t own like Kickstarter. The goal of the service is to help drive sales to these companies among customers that already shop at Amazon. Those customers can easily chose the “Pay with Amazon” option when making a purchase. But it also comes down to trust, the company said.

“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,” Amazon VP of seller services Tom Taylor told Reuters.

Amazon’s new payment handling could also provide the company with another source of revenue on top of what it already makes through online retail, hardware sales, and of course its cloud services.