Amazon Payments Overview
Amazon Payments (payments.amazon.com) is an electronic payment service that allows Amazon.com customers to pay for purchases on other websites by using their Amazon.com account. Amazon customers simply store their credit card and shipping information in their Amazon Payments account and then can checkout without having to enter payment information again on websites that accept Amazon Payments. The service is similar to PayPal and Google Checkout in that customers can either pay with the information stored in their accounts or enter payment information during the checkout process.
On August 13, 2014, Amazon launched a new service called Amazon Local Register. Similar to Square, the service utilizes a free app and a swiper that can be plugged into phones or tablets to enable merchants to accept payments. Amazon Local Register integrates with a merchant’s Amazon Payments account. For more information about Amazon Local Register, please see our Amazon Local Register review.
This Amazon Payments review is only going to focus on the Amazon Payments business account used by merchants for accepting payments from customers. Amazon offers two different services called “Checkout by Amazon” and “Amazon Simple Pay” that serve varying business needs and will be covered in detail below.
Checkout by Amazon
Checkout by Amazon is a service specifically tailored for e-commerce retailers that sell tangible goods. An advantage that the service offers over many of its competitors is that the default checkout process takes place without the customer leaving the retailer’s website. This is accomplished by using one of two different checkout options. The first and easiest to implement, called “Standard Checkout,” opens a co-branded pop-up window to Amazon Payments that allows the customer to complete the transaction. Although this is the simplest method, the drawback is that the pop-up may be blocked by a customer’s web browser and could result in lost sales.
The second, called “Login and Pay with Amazon,” keeps the entire checkout process on the retailer’s website but requires more advanced programming knowledge to implement. Merchants that have a high volume of sales, but lack the programming knowledge, are advised to seek out an experienced web developer to install this option.
Amazon Simple Pay
Amazon Simple Pay is for businesses that sell digital and virtual products (eBooks, stock photos, WordPress themes, etc.) or subscription services, or that need to facilitate payments between buyers and sellers of an online marketplace. Simple Pay can also be used to collect online donations.
Nearly all of Amazon Simple Pay’s applications are simple to implement by copying and pasting code snippets into the merchant’s website. Amazon also includes a back-end dashboard that allows merchants to manage sales and recurring transactions.
[spoiler title=”Click to see a video explanation of Amazon Payments”]
|Key Points – Sales & Marketing|
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||Yes|
Amazon uses no misleading sales tactics or marketing of its Amazon Payments service. The service is primarily marketed through Amazon’s traditional channels, and the company does not engage in any deceptive rate quoting that is apparent to this reviewer. In addition, there are no merchant complaints indicating that Amazon misrepresents its fees or fails to disclose important terms.
|Key Points – Costs & Contract Terms|
|Swiped rate:||2.9% + $0.30 or less|
|Keyed-in rate:||2.9% + $0.30 or less|
|PCI compliance fee:||None|
Amazon Payments has no setup fees, monthly fees or cancellation fees. Processing fees vary based on the Amazon Payments account type, the payment method being used by the customer, and the volume of sales. As a general rule, higher-volume merchants who use more secure payment types will pay less in processing fees through Checkout by Amazon and Amazon Simple pay.
Checkout by Amazon and Amazon Simple Pay Fees
Sale amounts greater than or equal to $10:
- 2.9% + $0.30 for all transactions
Sales amount less than $10
- 5.0% + $0.05 for all transactions
Monthly Volume Rate Discounts
- 2.5% + $.30 for all transactions for monthly payment volume from $3k-$10k
- 2.2% + $.30 for all transactions for monthly payment volume from $10k – $100k
- 1.9% + $.30 for all transactions for monthly payment volume over $100k
Other Payments Methods (excludes Checkout by Amazon and Amazon Simple Pay)
|Payment Method||Less than $0.05||$0.05 to $9.99||$10.00 and more|
|Bank Account||2% of transaction+ $0.05||2% of transaction
|U.S. Credit Card||
|5% of transaction
|2.9% of transaction
+ $0.30 *
|International Credit Card||
|6% of transaction
|3.9% of transaction
+ $0.30 *
|Amazon Payments Stored Funds||1.5% of transaction
|1.5% of transaction
* Credit card sales that qualify for volume rate discounts
Amazon Payments Business Accounts that have good standing and have a high volume over three months in a row can apply for the discounted rates below:
|Type of Card||$3K-10K||$10K-100K||$100K or more|
|2.5% of transaction
|2.2% of transaction
|1.9% of transaction
|3.5% of transaction
|3.2% of transaction
|2.9% of transaction
Account Transaction Limits
All Amazon Payments Business Accounts start with a $500 limit for receiving funds until the merchant adds a credit card to the account. Once a credit card has been added, merchants can receive up to $10,000 in payments. If a verified bank account is also added the limit can be raised significantly or removed altogether.
Generally speaking, the rates offered by Amazon are similar to those offered by PayPal and other online payment processors. This, coupled with the absence of hidden fees, makes the service a very affordable option.
|Key Points – Complaints & Service|
|Live customer support:||Yes|
|Most common complaint:||Hidden fees|
For a business of its size, Amazon Payments has relatively few complaints filed online. The majority of complaints appear to be filed by consumers rather than merchants. Most of the customer complaints are directed towards the sites that use Amazon Payments, with Amazon Payments getting blamed for problems that look to have been caused by the websites themselves.
Of the few merchant complaints, the majority are attributed to the holding of a merchant’s funds by Amazon or poor customer service from Amazon. Upon reading these complaints, most of them appear to be based on the merchant simply not understanding how Amazon Payments handles the payment process. A handful of complaints also report glitches in the account setup process.
Amazon Payments handles most of its customer support through email, and this reviewer had difficulty locating a dedicated Amazon Payments phone number for customer support; however, this number is Amazon’s general support line: (866) 216-1072.
If you know of a dedicated support line for Amazon Payments, please leave it in the comment section below.
Amazon Payments does not have a dedicated Better Business Bureau (BBB) profile; however, Amazon itself holds an “A+” rating with the BBB. Given the fact that this profile is not an accurate representation of merchant satisfaction with Amazon Payments, we will not factor a BBB report into the company’s overall rating.
Overall, Amazon Payments scores well. The standout benefits of the service are that there are no monthly fees and there are simple implementation methods to choose from. The drawbacks are that the processing fees are slightly higher than a traditional merchant account and customers must also have an account to use it as a form of payment. Since not every customer will have an Amazon.com account, Amazon Payments is best used as an additional payment alternative to other payment options.
This review was originally published on 12/11/12 and was last updated on 8/13/14.
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