Amazon revealed a new payments product today called Login And Pay With Amazon, which lets websites allow people to do exactly what you would think (use their Amazon accounts to make purchases).

This is a product that many have been expected for years, but is finally coming to fruition.

“Amazon has more than 215 million active customer accounts,” said Tom Taylor, Vice President, Amazon Payments. “Login and Pay with Amazon enables companies to make millions of our customers their customers by inviting online shoppers with Amazon credentials to access their account information safely and securely with a single login.”

The feature works on tablets, mobile and desktop devices.

Sites that take advantage of the feature get low pricing and fraud protection from Amazon at no additional cost. Fees are assessed on a per-transaction basis, and are based on a percentage of the transaction amount plus a per transaction fee. The standard rate is 2.9% + $0.30 per-transaction for transactions of $10 or more.

They do offer volume discounts for transactions of $10 or more when the merchant processes an average transaction volume of $3,000 or more over three months. Here’s a look at the rates:

Discounts are offered for micropayments and nonprofit organizations. For transactions less than $9.99, the fee is 5.0% + $0.50 per transaction. Eligible nonprofits get a rate of 2.2% + $0.30 per transaction.

When a customer logs in, the merchant gets their name, email address and zip code, which can be used to create an account and personalize the user’s checkout experience. According to Amazon, it enables merchants to make it easy for customers to create a profile and view their order history, and helps the merchant recognize returning customers.

The feature has the potential to increase conversion rates if for no other reason than the familiarity with the Amazon brand and users having existing accounts. The mobile-readiness factor should help in that regard as well.

Amazon provides a set of widgets and APIs that merchants can embed on their sites and integrate with their back-end systems. It uses OAuth 2.0. It can be implemented for free. You can sign up here.

Obviously this puts Amazon in direct competition with PayPal, who meanwhile, is expanding its efforts in physical stores.

Images: Amazon