Login and Pay with Amazon: Potential Competition for PayPal?

Amazon launched a new service this week that helps streamline transactions between online merchants and customers. “Login and Pay with Amazon” allows online businesses to implement a login/pay system using existing Amazon accounts so that customers can easily go from browsing to buying using their Amazon account information. Not to be outdone, PayPal announced an upgrade to its mobile app called Payment Code that interacts with existing barcode scanners and PIN pads.

“Amazon has more than 215 million active customer accounts,” said Tom Taylor, VP of Amazon Payments. “Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login.”

“For Amazon, that means a (unknown) cut in the sales margin by acting as middleman,” reports Engadget. “For businesses, it means an easy implementation of a widely used system (a ‘set of widgets and APIs’ are all that’s needed to get the pay service running on your site). And for customers… it means their Amazon login will now work across the Web (where implemented, that is).”

Businesses with websites or mobile apps (Android and iOS) interested in the new service, can get information at the Login with Amazon Development Center.

In related news, PayPal announced this week that it is retooling its popular mobile wallet app.

“Called Payment Code, the technology uses the barcode scanners and PIN pads millions of retailers already have installed at their sales counters,” reports GigaOM. “According to PayPal head of retail Don Kingsborough, that allows PayPal to overcome two of the biggest obstacles to mobile payment adoption: getting the proper point-of-sale equipment into stores and training salespeople how to use it.”

“PayPal is partnering with Discover Financial Services, using its Discover Network to initiate its transactions. While that means PayPal won’t be able to tap into every store’s point-of-sale systems, it still gains an enormous potential footprint. The Discover Network is in 7 million retail locations in the U.S. alone.”

The new mobile payments service is expected to launch the beginning of next year.