Amazon launches online subscription payment service

American e-commerce giant Amazon has launched third-party payment services for subscription based and recurring payments, expanding its money transfer business.

American e-commerce giant Amazon has launched third-party payment services for subscription based and recurring payments, expanding its money transfer business.

The new service aimed at start-ups and similar companies will enable its 240 million active monthly users to use their stored credit and debit card information to pay for subscriptions such as mobile bills or music subscriptions.

Amazon, in turn, will charge a transaction fee, reported Reuters.

The e-commerce firm has been piloting the online payment service with Tucows’ mobile phone company Ting for last few months. It has been observed that users making recurring payments through Amazon’s payment service spent 30% more on Ting’s website.

In an interview with the news agency, Amazon vice president of seller services Tom Taylor said the service would encourage Amazon users who might otherwise be skeptical of submitting their credit card details to fledgling companies to try out them out.

"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," Taylor added.