Just in time for the holiday shopping season, Amazon has introduced a new layer of security to its Amazon Payments system which is intriguing for what it might mean later on.

Amazon Payments has been popping up all over the Web as a way for customers to pay for purchases with the information they have stored with the mega-retailer.  Well, starting today, you can now use the payment system without ever having to enter your credit card information on another site that uses the system, and you can also check out in just three steps.

PayPhrase is a system where you create a phrase unique to you – each phrase can only be used once in the system, so expect some wacky combinations cropping up – that you will enter anywhere you see the Pay Phrase dialog box.  You enter your phrase, enter your pin number when prompted, click the order button, and you’re done.  Pretty simple, and also fairly secure as only Amazon will have access to your credit card information.

While this is already potentially handy, we here at StarterTech think the true genius of this system will be realized once it shows up in mobile applications.  It doesn’t matter how good your smartphone is, typing all of your information in for an order on a mobile device gets annoying.  The less you have to type in on your cell phone, the better, so this could be a major step forward for mobile payments.  Heck, we could even see it being used in restaurants.  Imagine a waiter walks over with an iPod Touch that has your bill shown, you type in your PayPhrase and pin number, and your bill is paid for.  Your waiter never touches or even sees your credit card.

Some people are laughing this system off, saying that if people can never remember their password, how will they ever remember this?  Give it some time, but we think this new tool could revolutionize several different aspects of commerce.