Amazon Pay is an online payment processing service offered by the online ecommerce giant. The Amazon Pay system can be integrated into ecommerce stores, shopping carts, and websites selling goods and services. Amazon customers can easily pay for goods and services anywhere using Amazon Pay — it automatically uses the personal payment information they have entered on Amazon to checkout and pay for goods elsewhere.
“Amazon Pay makes it simple for hundreds of millions of customers around the globe to check-in and checkout using information already stored in their Amazon account.” Amazon also offers this video explaining the Payments feature:
Amazon Pay provides businesses and buyers with several advantages.
Benefits for buyers:
Benefits for businesses:
Amazon Pay does have some potential drawbacks for businesses.
Related Article: What are “reserves” in credit card processing?
Now that we have the quick overview out of the way, let’s take a look at Amazon Payments in more detail.
As the biggest online retailer in the world, Amazon already has the debit and credit card details of hundreds of millions of customers. Using Amazon Pay as a payment option means they don’t need to re-enter their personal or financial details to process payments on your ecommerce site. This can reduce friction and lead to fewer abandoned shopping carts: a priority for ecommerce storeowners.
You can use your own branding throughout your website, shopping cart, and payment experience. Customers will be aware they are checking out through Amazon Pay, but the overall branding experience is yours to control.
Amazon Pay can be setup to charge and accept payments on a recurring basis, for example for subscription billing. Amazon Pay also works with Recurly, for more precise control of your subscription options. This makes it a viable option for any business that offers goods or services on a set schedule and needs to charge customers at regular intervals.
See also: Options for Recurring Payments.
Due to the huge penetration and awareness of Amazon Pay in the online retail space, an Amazon Pay logo can provide trust and reassurance to your customers. Amazon Pay can also help to optimize your conversion rates due to a deep understanding of the customer checkout process. Amazon’s A-to-z guarantee and fraud protection can also enhance customer trust.
Amazon Pay provides complete guidelines for using its buttons, integrations, and other elements in your ecommerce website or shopping cart. This includes banner and button guidelines, payment marks, logos, and a full marketing guide.
Amazon Pay provides several reports for businesses concerning customer satisfaction. Details included in the reports are the “Order Defect Rate” — the number of orders that have received negative feedback, an A-to-z guarantee claim, or a chargeback, and policy violations — issues you need to resolve to use Amazon Pay. Amazon wants you to maintain an order defect rate lower than 1% of orders.
Amazon Pay also provides settlement reports. These provide a detailed breakdown of activity, transactions, amounts, fees, and more for specific periods. Settlement reports can be downloaded easily and analyzed in a spreadsheet program or similar software.
Amazon Pay can update your CRM system with details of customer transactions, products purchased, and payments, helping you more easily track and manage customer information and tailor marketing campaigns.
Amazon Pay provides several benefits to consumers, which will encourage them to shop at your store. That includes:
Amazon Pay uses sophisticated algorithms and analysis to identify and stop potentially fraudulent transactions. All payments are handled with industrial-strength encryption to protect customer data.
If you want to accept Amazon Pay through your ecommerce store, you will need to fulfill certain criteria.
You must have:
To access payments customers have made through Amazon Pay, you will need to link your bank account and credit card with the Amazon payments system. Once you have shipped orders to your sellers and captured their payment information, Amazon can pay out your funds.
The amount of time it takes to get paid by Amazon varies, but be aware:
Amazon Pay also holds some of your funds in “reserve” — this reserve fund is intended to keep enough money back to refund customers in the event of an issue, A-to-z guarantee breach, or chargeback. The amount that Amazon Pay keeps in reserve is determined by your “merchant tier” — your reserve amount will go down as you maintain satisfied customers and process payments.
The amount Amazon will hold in reserve varies between the complete value of all your transactions over the last seven days and 3%, depending on your tier.
Amazon Pay prices its services based on the value and volume of transactions you process through its systems. There are no setup fees, monthly fees, or other fees, as Amazon charges according to a flat-rate pricing model that includes all costs.
The fees work as follows:
2.9% of the total amount plus 30 cents per transaction.
This works out as follows:
This pricing is identical to many other online credit and debit card processors including Stripe, PayPal, and Braintree.
For international transactions, Amazon Payments charges 3.9% of the total amount plus 30 cents per transaction.
This works out as follows:
This is more expensive than Stripe (which does not charge extra for foreign transactions) and less expensive than PayPal. It is the same price that Braintree charges.
If a charge is disputed by the customer and “charged back,” there is a fixed fee of $20. This is in addition to the loss of the funds from the original sale, which you will not keep.
For integrating Amazon into your site, you can expect:
Amazon Pay works with a number of certified partners and developers to make building and using Amazon Pay easier.
Amazon Payments has been used by over 25 million customers to buy products from ecommerce retailers. We explored what customers and businesses had to say about Amazon payments.
In general, reviews were positive, with businesses reporting that adding Amazon Pay as a payments option had increased their business. Others reported that Amazon Pay reduced cart abandonment rates due to ease-of-use for the customer. Amazon Payments received 4.1 out of 5 stars on G2 Crowd, with reviewers stating that the Amazon logo lent a sense of familiarity and trust to customers.
Negative reviews were mainly about Amazon Pay holding funds in reserve, both during the initial 14-day period after registration and setup, and on a rolling period once the setup period had passed. A couple of complaints also spoke to issues with setting up Amazon payments in the first place or installing it on a website. Some reviewers claim that the company pays slowly if you’re not a larger business or express difficulty with the documentation and integration process.
Given how many transactions, businesses, and customers Amazon Payments deals with, there were surprisingly few negative reviews.
Amazon Payments does not have its own Better Business Bureau profile, but Amazon.com has an “A+” rating with the BBB. Given that not all reviews talk about Amazon Payments, the processing arm, as opposed to Amazon the ecommerce site itself, we’re not including those details here.
Amazon Payments can be a viable choice for businesses wanting to expand their customer payment options. A combination of ease-of-use together with enormous Amazon brand recognition and trust is likely to result in better conversion rates and fewer cart abandonments. Be aware that portions of your funds may be held in reserve by Amazon to resolve customer disputes, and they can be slow to pay. Additionally, Amazon Payments’ flat rate pricing structure may not be the most competitive pricing available.
If you run an ecommerce store and are curious about what pricing you could get, try our processor comparison tool.
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