Amazon Takes On eBay's PayPal, Google's Checkout

Amazon.comAMZN jumped 2% Monday after the online retailer rolled out a new payment service, challenging eBay'sEBAY PayPal and Google'sGOOG Checkout.

The service, called Flexible Payments Service, will allow users to make payments directly from their bank accounts as well as with credit cards.

The service also allows Web developers to easily create payment engines on their Web sites. And while Checkout has suffered after being launched with much fanfare in 2006, Amazon feels that its extensive experience in the payments space gives it a leg up.

"Since we've been processing payments for over 10 years, we have a really good understanding of the cost and fee structures which are associated with each type of payment method," Amazon senior manager Jeff Barr wrote on the company's Web Services blog.

"We've taken all that we know about dealing with credit cards, bank accounts, fraud checking and customer service and wrapped it all up into one convenient package," Barr wrote.

Amazon's new venture comes amid a resurgence in the stock. Shares have almost doubled since the beginning of the year after the company delivered two strong quarters that topped Wall Street's expectations. Shares of Amazon gained 2.34% to trade at $78.60 on Monday.

The new payment services also marks the expansion of the high-profile Amazon Web Services platform. Amazon's Web services offerings had already sold storage space and computing capacity as an on demand service. Amazon CEO Jeff Bezos believes that the Web services offerings over time have the potential to approach the size of the company's core e-commerce business.

While still in trial mode, the payment service has long in the works at Amazon, according to Barr.

"At many of my presentations, audience members have frequently asked if we were thinking about exposing the component parts of our payment processing system as a web service," Barr wrote. "Well, we were doing a lot more than thinking about it, we were actually doing it."