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Amazon taking on PayPal by expanding online payments business

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Amazon wants to take the lead in the crowded online payments market. Reuters reports that the e-commerce company is now letting users manage their digital subscriptions and monthly bills using credit card information stored on their Amazon profiles. The move puts Amazon in line to potentially surpass PayPal as a dominant payments player, while also putting it well ahead of other major companies moving into the field.

A chance to outstrip the competition

Amazon already derives considerable profits from Payments, which launched in 2007. According to a recent IDC consumer payments survey, 40 percent of respondents rely on it as a payment method. However, that still trails behind PayPal; though the gap is closing, more than half of respondents use PayPal for payments. By pushing into the realm of digital music subscriptions and bill payment, Amazon has a real chance to outstrip the competition.

PayPal isn't the only company Amazon is going after with this new push. Apple is already a major player in online payments by way of iTunes, and The Wall Street Journal reported earlier this year that the company is in the process of developing a mobile payments solution of its own. Meanwhile, Google is still struggling to stake a claim in the market, even launching a Google Wallet debit card last year.