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Amazon.com (AMZN - Analyst Report) has announced the launch of a new online payment option, “Login and Pay with Amazon”, that will allow shoppers to make purchases on websites by logging in with their regular Amazon account details.

This new payment option is believed to combine various payment options that shoppers already have access to on Amazon. So far, users that have signed up for an Amazon account and entered their respective credit card and shipping information with the company could buy things on Amazon’s website using this payment option.

But following the launch of the new service, shoppers can pay for purchases on third-party retail websites as well by using their Amazon logins and accounts. This eliminates the need to separately enter their account details for each purchase made at any third-party retailers. Amazon will collect a 2.9% fee, plus an additional 30 cents for each transaction from these third-party sellers. However, Amazon is not willing to share user credit card information with participating merchants, which may reduce the system’s popularity among merchants.

With the launch of “Login and Pay with Amazon”, Amazon has posed a direct challenge to eBay’s (EBAY - Analyst Report) PayPal. This move is believed to be in response to PayPal’s new option for in-store payments, using advanced bar codes on mobile phones or special password codes.

Amazon has gone on to become a veritable consumer electronics giant from being an Internet retailer. The company recently refreshed its Kindle Fire tablets, but other models are expected in the next few months. But Amazon might not stop there. If the rumors are to be believed, the company has many more devices in the works, including a smartphone, an audio streaming device, and an Apple (AAPL - Analyst Report) TV competitor.

Amazon’s hardware competes with both Apple’s and Google’s , although competition with Google is fiercer, since Amazon has adopted Google’s Android operating system, but not Google Play. Further, Google is entering its core market with product search ads and Google Shopping.

Currently, Amazon has a Zacks Rank #3 (Hold).
 

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