It looks like PayPal might have some stiff competition in the electronic payment market very soon. According to the latest rumint, Amazon is developing a new payments strategy that is poised to compete directly with PayPal. According to the report, Amazon is planning to introduce a new subscription-based payment system.

Just like PayPal, Amazon will collect a small fee for each transaction, but they plan to allow users to pay bills through this subscription system using their stored credit card information on Amazon's servers. Amazon basically wants to become the middleman, by offering the ability to pay bills and process transactions for both small and large companies.

Here's a quote with a few more details,

Amazon has been testing its payment service with a few startups, including mobile phone firm Ting. The main focus for the effort is subscription-based payment systems, though it could technically be applied to anything else. Like PayPal, Amazon collects a fee for each transaction.

In order for the payment system to get up and running, Amazon needs to partner with companies that will accept such transactions. It's not clear how many firms have so far signed on to the service.

Regardless, services like PayPal and Amazon's deliver some added security in an increasingly insecure world. By providing PayPal and Amazon payment buttons, otherwise unknown merchants can provide some security to customers who wouldn't want to share their credit cards with unknown firms.
Supposedly, Amazon plans to announce this new service as soon as next Monday. We will keep an eye out for anything official.

Thanks to our tipsters who sent this one in!

Source: CNET