Great news for business models that monitize by charging users: new competition in the payments space is heating up.

The iPhone AppStore capitalizes on 75 million iTunes accounts attached to credit cards to make buying cheap apps frictionless for users. I still want to extend it to paying for web and desktop apps and add flexibility for content and subscriptions.

PayPal powers payments on EBay (where the payments are larger), but doesn’t have quite the same easy single-click power and hasn’t been widely applied to the application/content space. Others, such as Google Checkout have never reached critical mass.

Yesterday, Amazon.com launched its Flexible Payments Service (previously in limited beta), touting it as “the first payments service designed from the ground up for developers.” They clearly intend it to work for e-commerce, digital goods, donations and online services, including digital music and online storage, and provide for subscriptions and recurring payments. Customers pay using the same login credentials, shipping address and payment information they already have on file with Amazon. In other words, it looks like it could compete with both of the above.

Sounds like a great foundation for the service I want to create…