Micropayments are small dollar amount transactions. Current payment methods like PayPal are designed to work best with large dollar amounts. For instance, most of my FreeNameAStar.com transactions are $2. I process through PayPal 4 or 5 of these per day. The PayPal fee for these is 36¢ and more for overseas transactions this come so 18% of my gross sales going to PayPal.

I could have integrated Google checkout, but these are not much better, and would also add to the complexity of the system which is too complex as it is. (FreeNameAStar needs far too much babysitting. Users continually find new ways to screw up their stars. The system needs a redesign.)

Amazon has gone into beta testing with their FPS – Flexible Payment Service. The same $2 payment would cost 15¢ for credit cards, less for debit cards and bank transfers. This is a maximum of 7.5% on my most common transaction.

I will be signing on with FPS. They have a daunting approval process and they require things like a Credit Card, a Drivers License, and a Checking Account number. You then have to send them a FAX to verify your information. I decided to wait a bit and think before I give away all of this extra sensitive information. I have used Amazon affiliate system for 6 or 7 years and I have bought thousands of dollars worth of books since Amazon first started up. (Actually Erica was the first person that I know to buy something from Amazon.) I think Amazon can be trusted with my private information. I will sign up, I just need to ponder this and discuss it with Erica.

With PayPal, Google Checkout, and Amazon FPS there is no longer any reason to use a credit card company. You should not have to pay several hundred dollars a month to take credit cards. Even brick and mortar stores can take credit cards through these services. Credit card companies offer services to large businesses and there has to be a cutoff point where they become cost effective, but I think that most small businesses could save money by taking payments through the online services.

I am going to design two alternate Name-A-Star sites using different approaches to registering and taking money. One of them will use Amazon FPS. FPS doesn’t appear to have the tools that PayPal has. There is no Buy-it-now button or shopping cart. It looks like I will have to roll my own or look for open source solutions. I have not downloaded the documentation, but there will probably be a simple example that I can hack for my own purposes.

Amazon.com: Amazon FPS, Amazon Flexible Payment Service: Amazon Web Services: “Amazon Flexible Payments Service (Amazon FPS) is the first payments service designed from the ground up specifically for developers. The set of web services APIs allows the movement of money between any two entities, humans or computers. It is built on top of Amazon’s reliable and scalable payment infrastructure.”