Amazon tries out in-app payments

Posted by Mark Raby

Amazon is reportedly entering a market currently dominated by Google and Apple.

Want to download some new levels in that fun Android game you just played? Or, would you like to sign up for a subscription to a mobile version of a newspaper? Either way, you might soon have a new way to pay for this kind of mobile content.

According to reports, Amazon is working on a system that would allow app developers to accept payments through its online portal instead of going through Google's official channel on Android or through the App Store on the iPhone or iPad.

For Amazon, the technical implementation probably isn't that difficult. The company already has a third-party online payment system that allows owners of online stores to use Amazon's user authentication and payment processing platform to pay for purchases.

That system will simply be modified for smartphone and tablet customers. According to a Bloomberg report, Amazon will charge a 30% commission to developers that use its in-app payment platform. That's the exact same commission as it charges developers that host apps on the Amazon Appstore, a platform that in some instances has actually been more successful than the official Android Market or Google Play store.

In-app purchases are an increasingly important part of the mobile marketplace. A growing numbers of apps are free to download but then get users hooked and so involved in the app that they start buying individual pieces of content that end up amounting to more money than if the developer had just charged a small flat rate for the entire app up front.

According to analyst group IHS, in-app purchases will be a $5.6 billion market by 2015.