For years eBay's (NASDAQ:EBAY) PayPal service has offered an alternative to directly sharing credit card info as a way for people to pay for online purchases.

What perhaps fewer people know is that Amazon (NASDAQ:AMZN) has offered a similar service that lets users pay through their account with the online retailer on thousands of partner sites. The "Pay with Amazon" button may not be as ubiquitous as the "Check out with PayPal" one, but Amazon has slowly been growing its online payment business. As of next Monday, the online retailer will be stepping up the competition as it starts managing subscription payments for start-ups and other companies.

Amazon has been testing the new service over the last several months with start-ups including Ting, a mobile phone company that is part of Tucows, Reuters reported. Early results have been encouraging. Those who used recurring payments by Amazon spent 30% more on Ting's website, product manager Justen Burdette told the news service.

This expanded payment service is another assault on PayPal and an attempt by Amazon to leverage the 244 million active users whose credit card information the online giant has on file. The payment system -- much like PayPal's -- lets users check out and pay using their Amazon credentials on partner sites. This gives people peace of mind and keeps them from having to enter credit card info on an unfamiliar site. Even on trustworthy websites paying with Amazon or PayPal is convenient it avoids having to create log-ins and enter credit card data for online retailers they might only visit once. 

PayPal has had widespread success with its services while Amazon has struggled to gain traction. That may be because retailers don't view PayPal (or even eBay) as competitors, while Amazon clearly is.

What is Amazon doing now? 

Amazon's new subscription service allows the company's registered users to use credit card info stored on to pay for services like a monthly phone bill or a digital music subscription. The online retailer charges a fee on each transaction.

In some ways Amazon's new subscription service is an offer to share its credibility with partner sites. People are wary in general of sharing their credit card info with unfamiliar sites and the Target (NYSE: TGT) data breach has many questioning whether even well-known companies can keep data safe. Few Amazon customers worry about whether the retail giant will keep their credit card info protected. By handling payment for other sites and processing the transaction Amazon should make people more willing to buy from someplace they had not purchased from previously. This trust factor may be even more important for recurring sales because it involves giving permission to process credit card data multiple times.  

"If you think about giving a merchant that you may not know very well the right to continue to charge your credit card in the future, you really want to know that a good relationship with Amazon stands behind that," Amazon vice president of Seller Services Tom Taylor told Reuters. We hope whoever the next Spotify out there is thinking about Amazon."

Amazon vs PayPal

While PayPal dwarfs Amazon as a payment system Amazon has many more registered users. PayPal only has 110 million users to Amazon's 240 million. Of course, PayPal's entire reason for existing is processing payments and the company has become the online standard for this type of third-party financial transaction. Both brands are heavily trusted and most customers of either would find a "Pay with Amazon" or "Check out with PayPal" button a reassuring choice on an unfamiliar website.

Amazon may be entering the subscription space now because PayPal purchased another player in the field, payments gateway Braintree, for $800 million late last year. Braintree already offers recurring billing.

To keep things competitive Amazon will be matching what PayPal and Braintree (which is still run as a separate brand) are charging  -- 2.9%, plus $0.30 per transaction. 

PayPal is a growing brand that showed increases across a number of its business segments in the first quarter. In its first quarter PayPal net total payment volume grew 27% with Merchant Services volume up 32% and on-eBay volume up 15%. The service also gained 5.8 million new active registered accounts to end the quarter at 148 million, up 16%, while revenue grew to $1.8 billion. 

Those are big numbers even by Amazon's standards and competing in the space is markedly easier when you already have 244 million credit cards on file.

Can Amazon win?

Amazon won't be able to eliminate PayPal but it should be able to win business for its new subscription offering. Traditional retailers may view the online giant as a competitor and choose to work with PayPal instead, but subscription services are not likely to feel the same way.

Offering Amazon checkout makes a new or unknown service instantly credible. This is likely a win/win for Amazon and the sites it partners with. Being able to offer a checkout option that customers see as safe should make more customers willing to pay for subscription services they want but were wary about.

This is not a game changer for Amazon, just another tool in the Swiss Army Knife of solutions it offers. It will take time to build, but someday "Pay with Amazon" may be as familiar as seeing PayPal as a checkout option.