Amazon expands payments, PayPal founder launches Affirm Split Pay

Online payments are heating up as Amazon (NASDAQ:AMZN) launches a PayPal (NASDAQ:EBAY) competitor and a PayPal co-founder readies a new payment strategy.

Amazon will now manage payments for subscription services, allowing customers to pay bills for things like streaming music services with credit card information stored in Amazon's system. The program supports payments to start-ups and other companies, and lets users set up re-occurring payments, according to Reuters.

The roughly 240 million Amazon shoppers with stored credit card info will now be able to click the new payment button and have their accounts automatically debited.

Amazon has been testing the program with start-ups including Ting, a mobile phone company. Shoppers who used recurring payments by Amazon spent 30 percent more on Ting's website, said product manager Justen Burdette.
The service takes direct aim at PayPal, which has long let users pay monthly bills over its platform. But PayPal co-founder Max Levchin is countering with a new payments service.

Levchin has assembled a team of PayPal alumni to create Affirm, a new payments program that lets consumers split purchases into smaller monthly payments. It's a financing solution for small business owners and shoppers alike.

The startup is a financial services business called Affirm Split Pay. Affirm assumes the risk of credit, making full payment to accepting merchants and charging interest and merchant fees. Shoppers can apply for financing directly from the merchant's site and, once approved, will see the total purchase split into monthly payments.

Levchin co-founded payments company PayPal, now part of eBay, and game maker Slide. He has raised $45 million in venture capital for the initiative.

For more:
-See this Internet Retailer story
-See this Wall Street Journal blog post

Related stories:
EBay CEO comments pave way for Bitcoin growth
EBay lets users cancel transactions amidst data breach
EBay discloses data breach, asks users to change passwords
EBay pilots click-and-collect program, prepares to take PayPal in-store
Amazon will have 10,000 robots filling customer orders