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evolution through a series of accidents

zerosum dirt(nap)

Ruby, Rails, Micropayments, and Amazon FPS

August 08, 2007 by nap · Comments

Last week Amazon unveiled a beta of their new Flexible Payments Service, a potential Paypal-killer and Google Checkout-killer, among other things. At first glance, FPS seems to be everything that Paypal isn’t: well designed, API-centric, and built with developers in mind.

While everyone is busy barking about how Amazon is going to go head to head with Google Checkout and Paypal for purchases, they seem to be missing the more interesting development here. I’m talking about something that neither Paypal or Google are even attempting to do, as far as I know: micropayments.

Ty, Steve, and I spent some serious time putting together a few different iterations of an idea/prototype earlier this year, that involves micropayments and the street performer protocol. And some other stuff, too :-). Unfortunately, when it came time to tie it into a payment gateway, it became painfully obvious that what we needed didn’t really exist, so we compromised. And that compromise led to a bunch of problems and eventually what we felt was an unworkable solution. So it’s been in mothballs since. This looks like it could be what we were maybe waiting for.

If you check out Amazon’s rate schedule you can see why I’m excited:

For Amazon Payments balance transfers < $0.05:
20% of the transaction amount, with a minimum fee of $0.0025

OK, OK, so 20% is a hefty fee but not when we’re talking about the alternative being somewhere in the neighborhood of $0.30 USD + 2-3%. So yeah, pfft. This is HUGE. And yes, it does look like these micropayments only work when you’re using Amazon payments (as opposed to using a credit card, etc) but so what? I’m not so sure that’s an obstacle.

Another reason it’s so interesting to me is that they’ve decided to support three languages/platforms in their initial beta rollout: Java, PHP, and yes, my friends, Ruby. Oh, and the sample app? Yep. Rails.

Why aren’t we more excited about this?

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