BillMeLater Partners with UATP // Amazon Rolls Out "Checkout" and "SimplePay"

Ed Kountz | July 30, 2008, 12:35 PM

Recent updates from the ever-changing space of alternative online payments:

BillMeLater announced this week a partnership likely to gain it additional traction within a core business area--air travel. The deal partners BillMeLater with Universal Air Travel Plan (UATP), the airline-owned corporate travel payments network. The partnership allows airlines to integrate to BillMeLater via their existing connections with UATP, and extends BillMeLater acceptance to the call center, for customers buying tickets via phone. The deal comes as airlines are seeking to gain competitive advantage with customers, supporting payments convenience and lowering distribution costs while coping with high fuel costs and a sluggish travel market.

UATP is accepted by more than 240 airlines, and offers products including the UATP card for corporate subscribers, as well as in-house authorization, processing and risk management services, and an in-house settlement and clearing system for UATP charges for carriers who are not part of IATA or ATA.

For its part, Amazon.com has expanded its offerings in the payments space for merchants seeking to outsource some or some Internet transaction processing. Two approaches exist in innovating online payments. The first involves deploying other brands (such as BillMeLater or PayPal) on one’s e-commerce site (say, ToysRUs). The other involves leveraging an existing online brand more deeply into payments (Google’s strategy, and now Amazon’s). Amazon launched Amazon Flexible Payments in limited form in 2007, and have now rolled this in with two other products--Amazon Simple Pay, and Checkout by Amazon.

Checkout by Amazon allows customers to pay using their existing Amazon log-on, completing a purchase incorporating Amazon’s 1-Click checkout process, in addition to a variety of merchant-related management tools. Simple Pay is a streamlined version of the system, guiding purchasers to the Amazon Payments website to conduct the transaction.

Both have the same fee structure—for transactions $10 and over, merchants pay 2.9% of the amount of the transaction plus a 30 cent fee. Under $10, merchants pay 5% and 5 cents per transaction.

The online payments space is already crowded, and some merchants (including those who see Amazon as a direct competitor) are going to be cagey about incorporating a payments solution from the online retail giant. Yet for other merchants, particularly small-to-mid-sized ones, that size could also be viewed as a potential positive…giving them access to a payments service integrated with the #1 online retailer’s existing customer base.

Upcoming JupiterResearch will benchmark acceptance of existing and emerging payment options at Top 50 US merchants, a space that has grown increasingly crowded over the past two years. Our data shows that BillMeLater is tied with PayPal in terms of Top 50 U.S. merchant acceptance, and that both lead Google Checkout and eBillMe in acceptance terms by a sizeable margin.