Look out, PayPal: Amazon has a new payment service

The days of PayPal's dominance over casual payments online are changing rapidly. A little over a year ago, Google unveiled its Checkout service, which has become an increasingly popular way to purchase items from various online retailers using a single account. Today, Amazon.com is unveiling its own payment program that lets Amazon.com users purchase items or services using their Amazon.com account credentials and billing information.

The new program is called "Flexible Payment Service", or FPS, and is launching with an invite-only API for developers who want to integrate the new payment service. What does this mean to you, the user? If you've got an Amazon.com account, you won't have to create a special log-in or give up your personal information to participating sites in order to make a purchase. Considering how many users Amazon.com has, and the one-click nature of its Web-shopping model, this is kind of a big deal.

Of course, this doesn't come free. While there are no start-up charges for users or sites, Amazon collects a small fee for each transaction, from purchases as small, or smaller than $.01. The rates are listed on the FPS info page, and from the looks of things seem like a better deal for smaller transactions when compared to Google Checkout and PayPal.

One of the first sites out the gate with Amazon FPS integration is FreshBooks, an invoicing service we covered last year. Expect to see many others in the coming months as Amazon opens up the beta.