Evan Schuman's StorefrontBacktalk

Amazon.com issued a statement on Thursday (Dec. 30) saying that it was cutting off Bill Me Later as a payment option as of December 31, giving its customers less than 12 hours notice of the change. The highly anticipated move was a result of eBay’s October 2008 purchase of Bill Me Later.

Amazon’s statement offered no explanation for the move, merely declaring that Bill Me Later “will no longer be accepted as a payment method on Amazon” and that the change was “effective Wed., Dec. 31, 2008.” Amazon issued the statement on its own Amazon Seller Community forum on December 30 at 12:17 PM.

For the nitpickers in the readership (and I am proud to count myself among them), the statement was silent on the timezone question so it’s not clear whether it stopped accepting Bill Me Later at midnight New York time or midnight Los Angeles time. No matter. It’s history now.

As for orders in process, Amazon said they would be permitted to conclude. “All sales and orders processed with Bill Me Later prior to this date will continue to be processed. No changes are needed for these existing orders,” the Amazon statement said, before generously adding “Amazon customers can continue to use the remaining payment methods available on Amazon.com in future orders.” Not quite sure what confusion that last sentence had been attempting to address.

Bill Me Later issued its own statement, which explicitly made the eBay connection: “Based on the change of control of Bill Me Later, Amazon exercised (its) right in deciding to discontinue offering Bill Me Later as a payments option.”

Leaning toward the optimistic side of New Year’s Eve, Bill Me Later tried to keep the door open in case Amazon changes its mind. “We think Bill Me Later provided a valuable service to shoppers on Amazon.com, and we would welcome the chance to work with Amazon.com in the future.”

Not Unexpected

The thought that eBay’s 2008 October purchase of Bill Me Later would kill the Amazon deal is hardly new. Our coverage of the eBay deal announcement quoted one party involved as saying that “the Amazon and Bill Me Later relationship is dying if not dead already.”

But the history of Amazon and Bill Me Later dates back a year, when Amazon announced in December 2007 that it would accept Bill Me Later as a payment option at some point in the future, a move it didn’t make good on until July 9, 2008.

Amazon also announced at that time that it was making an equity investment in Bill Me Later, but the company wouldn’t say how much of an investment it was making nor how large a share it was buying. Given that Amazon never received any seats on the board of directors of Bill Me Later, it’s reasonable to conclude it was a relatively small minority stake.

But the good feelings didn’t last long. Exactly 20 days after finally accepting Bill Me Later payments, Amazon rolled out its own alternative payment approach, called Amazon Payments.

Whether the introduction of Amazon Payments made Bill Me Later feel uneasy about the relationship is unclear. But in two-and-a-half months, the eBay acquisition was signed, sealed and announced.

So the alternative payment space continues, with Web behemoths eBay (Bill Me Later), Google (Google Checkout) and Amazon (Amazon Payments) all having their own horses in the race.