FPS, Amazon says, "is the first payments service designed from the ground up specifically for developers" and "unmatched flexibility in how they can structure payment instructions." Payments can be made by credit cards, bank account debits, and Amazon Payments balance transfers.
The most important feature: people can pay using the same login credentials and payment information they already have on file with Amazon. That means people don't need to have their credit card and other personal information stored at yet more ecommerce sites. For payments over $10, Amazon will charge 2.9% + $0.30. This matches PayPal but is higher than Google, which is eating fees to gain market share (Google charges 2% + $0.20).
This may quickly become Amazon's most popular, and most profitable, web service. Anyone can now leverage their tens of millions of customers and provide a very simple payment option.