Filed under: Transportation
We knew Tesla had plans to open up dealerships in some of the, how should we say, more affluent markets in the US, and according to the company its first dealership and service center will be opened in one of the richest neighborhoods in the States, Menlo Park (just an electric hop, skip, and jump away from its San Carlos-based HQ).
Amazon, in its bid to become the underlying utility of the new web world, today confirmed what had been rumored earlier: a payment service that will compete with PayPal and to some extent, the nascent Google Checkout services.
Just to be clear, Google Checkout and Amazon FPS are not building their own payment service, where PayPal has a clear lead. Instead they are using the credit card infrastructure to enable payments and online transactions.
As a discrete offering, Amazon Flexible Payment Services (still in beta) may seem like a me-too service. However, when juxtaposed against the whole gamut of web services being offered by the company, it is a Trojan horse like strategy, one that can start to eat away at PayPal’s business.
It is not a surprise, that both Google and Amazon want a slice of PayPal’s cake. In the most recent quarter, PayPal had net revenues of $454 million, up 34% over the $339 million reported in Q2-06. More importantly, PayPal Merchant Services transactions jumped 57% to $4.92 billion globally from the $3.13 billion reported in Q2-06.
PayPal has become a defacto standard in the online transactions and payment services, and for anyone to have a chance to beat them there are two options: use money (and price) to lure the eCommerce players, as Google is doing with its Checkout Service. The second option is to offer a developer friendly service, that can allow developers to embed a payment solution into their offerings. Werner Vogels, CTO of Amazon explains it best:
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.
As developers who are already using Amazon’s EC2 and S3 web services start to embed FPS, what they are doing is slowly shifting the momentum away from using PayPal and other rivals. Allowing the buyers to use their Amazon credentials to buy the goods (or services) from these developers, they are also increasing their economic opportunity.
A small web-app developer can now build, host, process and get paid for his efforts right over the Amazon infrastructure, without having to spend money upfront. As Amazon Web Servies team notes on its blog:
Seriously, the 69 million active Amazon.com customers can now use FPS to pay for the applications that you’ll undoubtedly want to build. On the other end, the first wave of FPS applications will be available very soon.
While I can’t put it as eloquently as uncov does, but I do agree with their thesis that this is going to cause major headaches for PayPal.
The new service promises speedy at-home delivery of groceries, including fresh produce, at “competitive everyday prices.” It’s available only in Seattle currently, and has not been officially announced. But at least one person caught a glimpse of an Amazon Fresh truck driving around downtown Seattle.
Users select and pay for groceries on the site. They can then choose to pick up the items themselves locally, or, with a minimum order size, have them delivered next day within a one hour time slot. Groceries will also be delivered to doorsteps pre-dawn in a temperature-controlled container.
A year ago Amazon began experimenting with sales of non-perishable food and household items, but did not deliver them directly and perishable goods were not available.
If you are a Seattle reader, keep your cameras handy. We want a picture of the delivery truck.
Webvan, which had a spectacular IPO and quickly expanded to 26 cities, went bankrupt in 2001. Before closing down, Webvan had acquired competior HomeGrocer. Coincidentally, Amazon was an investor in HomeGrocer.
The company leverages the web to add portability and a social layer to their music player. There is currently no cap on the number of songs you can upload to the player, so you can create a potentially unlimited music library you can listen to anywhere. Streampad is a nearly identical product with less polish.
The company competes in the increasingly crowded online music locker services like Mp3tunes, Maestro, imeem, Streampad, Songbird, and MediaMasters. The service does benefit from being simple, free, and social, but incumbents have a steady head start. Hype Machine, RadioBlogClub, and Blogmusik are also other low hassle ways to listen to music at work.
Anywhere.fm is looking to make money outside of charging users for their service. They are considering the obvious step of affiliate music sales for songs you don't own, inserting audio ads in radio streams, and selling music directly. Currently the player lists indie music from Garage Band.com, which could turn into a direct point of sale.
Anywhere.fm is a Y Combinator startup.
Update: Good video review is here.
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.
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