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Amazon Will Now Manage Subscription Payments for Startups and Businesses Forging into PayPal's territory, Amazon expands its reach with online payments.

By Laura Entis

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Starting today, Amazon will manage subscription payments for small businesses and startups.

That means that Amazon users can now use credit card details stored on the site to pay for automatically recurring subscriptions -- such as digital content subscriptions, membership dues or recurring donations and pledges -- directly on a startup's or business's website.

The ecommerce company has been piloting its new subscription-management service for the last few months with a select group of startups, Reuters reported. One of those companies is mobile-phone business Ting. Justen Burdette, a product manager at Ting, told the outlet that customers who paid for recurring subscriptions via Amazon increased their spending on Ting's website by 30 percent.

Related: Stephen Colbert Throws Punches at Amazon

Amazon's new service can help small businesses and startups attract customers who may otherwise have been hesitant to hand over their credit card information to a new business because, like PayPal, it allows users to click a button on a startup or business's website and pay for a recurring subscription with their Amazon credentials. The company, like its competitors, will charge a transaction fee. (Amazon's standard transactional rate is 2.9 percent + $0.30 per-transaction for transactions of $10 or more.)

That said, Amazon may face a little bit of backlash from these startups, as the giant corporation has been known to extend its offerings into new markets and in the future could become a competitor of these smaller companies, instead of an ally.

The timing of this announcement couldn't be more perfect. It has been widely rumored that Amazon will be announcing its first smartphone on June 18. By offering to manage subscription payments, this could help get more mobile-app makers on board.

For more details about the service, check out Amazon's page on automatic payments.

Related: Amazon Is Being a Big Tease About Its 3-D Smartphone, May Reveal It June 18

Laura Entis is a reporter for Fortune.com's Venture section.

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