Amazon Payments Review
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Launched in 2007, Amazon Payments is a subsidiary of mammoth online retailer Amazon.com. For eCommerce merchants, the service allows customers to complete purchases, make donations, and set up recurring payments on a merchant’s website by using their Amazon.com account. Like PayPal, one of its main competitors, payment processing is conducted inline. In other words, a customer won’t have to leave your website in order to complete a payment.
Well-known online retailers currently using Amazon Payments include Monoprice and The Clymb. Click here to view a directory of other businesses that have signed up for the service. If you’re thinking about using the service as a customer, here’s a very simple overview:
Amazon Payments integrates with a variety of eCommerce providers, including Magento and Shopify. Click here for a full list of supported e-commerce providers.
Amazon Payments has very recently consolidated its services, with the old Checkout by Amazon (for online sellers of tangible, physical goods) and Amazon Simple Pay (for digital goods such as e-books or software) being combined into a single service: Login and Pay with Amazon. Amazon Local Register, a mobile payment option that used a smartphone/tablet app and a plug-in card reader similar to Square, has been discontinued with no replacement option being offered.
On the plus side, Amazon Payments is easy to implement and generally has positive reviews. When customers complete transactions at your store using Amazon Payments, they’ll be able to access Amazon’s popular A-to-z Guarantee and 1-Click shipping options. Also, customers can save time by using shipping and billing info already “on file” in their Amazon account when making purchases in your store. On the minus side, customers must have already made a purchase through Amazon in the past or be willing to open a new account in order to complete transactions using the service. Plus, some online shoppers still prefer to use PayPal, which remains the industry leader in third-party processors. Read on for our full review.
Products and Services:
Amazon Payments has recently consolidated some of their older, separate services into a single e-commerce solution: Login and Pay with Amazon. Features and highlights of this new service include:
- Identity. Merchants using Login and Pay with Amazon will gain access to customer’s names and e-mail addresses, allowing for a personalized online shopping experience. For customers concerned about privacy, this information (and whatever payment method you have set up on your Amazon account) is the only information from your account that is divulged.
- Inline checkout. Customers can enter payment information and complete purchases without having to leave your website. This is convenient for the customer and also increases the likelihood of completing a sale.
- Automatic payments. Login and Pay with Amazon supports recurring payments and automatically renewing subscriptions.
- Fraud protection. This free service protects your account from fraudulent transactions, lowering your costs and protecting your business.
- Merchant website integration. Amazon Payments provides a library of standardized payment buttons (and the code snippets to go with them) that you can add to your website. This library is available on the Merchant Tools page of their website.
Login and Pay with Amazon replaces several older services which are being retired. If you’ve used Amazon Payments in the past or are still using one of these older services, you’ll want to note the sunset dates and recommended alternatives:
- Checkout by Amazon – This was the old service that was used to sell both physical and digital products online. It has been replaced by Login and Pay with Amazon. While both services offer the same basic features, Login and Pay with Amazon features improved, more streamlined integration with merchant websites. Amazon Payments is still supporting Checkout by Amazon, but new user registrations are no longer being accepted. If you’re still using this old service, you should contact Amazon Payments to see about upgrading to Login and Pay with Amazon.
- Amazon Simple Pay – This service allowed merchants to sell digital products (i.e., video games or e-books) or collect donations. It offered the same features as Checkout by Amazon, but didn’t support the sale of tangible, physical goods. Amazon Simple Pay was retired on June 1, 2015, with existing account holders being migrated over to Login and Pay with Amazon. For more information, see their End-of-Life FAQ.
- Amazon Local Register – This service used a smartphone app and plug-in swiper to allow payments using a smartphone or tablet. Despite its apparent popularity, Amazon Payments stopped accepting new customers on October 30, 2015. The service was completely shut down on February 1, 2016. See the Amazon Register to be Discontinued FAQ for more details. While Amazon is not offering a replacement service, Square is an obvious alternative for merchants who need this capability.
Fees and Rates:
Login and Pay with Amazon features a simple, easy-to-understand fee schedule which is disclosed in detail on their website. Here’s the basics:
2.9% processing fee + $0.30 authorization fee per transaction (for domestic US transactions)
3.9% processing fee + $0.30 authorization fee per transaction (for cross-border transactions)
That’s it. There are no monthly fees, no setup fees, and no fees for PCI compliance. There’s also no early termination fees, as contracts are month-to-month.
Fees are based on a percentage of each transaction amount (that’s the total cost of items plus shipping and tax) and the authorization fee. Note that after sales are posted as “shipped” Amazon holds funds for three to five days. You’ll also have all initial transactions held in Amazon’s reserve for 14 days when you open an account, so be prepared to wait longer to get paid at first. Chargebacks are charged a $20.00 disputed transaction fee. More details about the fee schedule are available here. Overall, these rates are very similar to what competitors like PayPal and 2Checkout will charge you.
Contract Length and Cancellation Fee:
Amazon Payments doesn’t charge an early termination fee, and doesn’t make you sign up for a long-term contract. You can cancel at any time, with no penalty.
Sales and Advertising Transparency:
Amazon is so well-established that it doesn’t need to rely on traditional sales or marketing campaigns to reach users. With payment information stored for more than 200 million individuals living around the globe, it’s easy for the internet giant to spread the word about services through its site, via referral, or word-of-mouth. There are no hidden fees associated with Login and Pay with Amazon. As long as you take the time to read the FAQ’s on their website, you should have a good grasp of how the service works.
Customer Service and Support:
Amazon Payments offers businesses several different ways to educate themselves about the service, or to get in touch if problems or questions come up. Resources include the following:
- The Amazon Payments website includes an extensive Support section, with numerous topics for customers, merchants, and developers.
- The website also features a Merchant Tools page, with payment buttons for integrating Amazon Payments with your seller website. This page also has a useful Marketing Guide.
- The Amazon Payments Documentation page features Integration Guides, SDKs, and other resources to help you get set up.
- The Amazon Services Seller Forum has an Amazon Payments category featuring numerous discussions about using Login and Pay with Amazon.
- For more personalized assistance, a Contact Form is available for e-mail customer support.
- Phone support is also available, but only after you sign up for an Amazon Payments account. So, we weren’t able to check in and see how easy or difficult it is to reach a customer service representative like we do for most reviews. Service reps are available from 5:00 AM until 9:00 PM PST.
Negative Reviews and Complaints:
Compared to competitors like PayPal, we found fewer complaints floating around online, although that is in part due to the fact that Amazon Payments is still a relatively new kid on the block. We did find a few notable common complaints:
- Withholding Funds and Freezing Accounts – Users report Amazon holds funds for 90 days or longer and freezes accounts without prior notice.
- Accusations of Fraud – Some Amazon Payments merchants attest to being falsely accused of selling bootlegged goods. Like virtually all processors, the service will red flag your account if it finds evidence of fraud. Read Amazon’s list of prohibited items and activities here. If this list includes items or services you offer, you might want to consider a payment processor that works with merchants selling high-risk products instead, like Durango Merchant Services. You can read details about ways to avoid account freezes, holds, and terminations over here.
- Initial Hold – As mentioned above, Amazon’s reserve policy states that funds are held for an observation period of 14 days for new accounts, causing an initial delay in payment. After that they’re deposited daily.
Positive Reviews and Testimonials:
In addition to testimonials on the Amazon Payments site, there are several reports online from users who are satisfied with the payment processor. A thorough search resulted in the following common positive attributes, including:
- Increased Orders – Some users associate the integration of Amazon Payments into their site with increased sales.
- Quick Payment Process – Since shipping and billing info is on file with Amazon, customers can complete orders lickety-split.
- Merchant Protection – Merchants like being under Amazon’s umbrella for fraud and chargeback protection.
- Name familiarity – Since millions of people already use Amazon, customers that are less likely to input personal data in a new online store will likely feel comfortable buying through your Amazon Payments account.
Here’s a sample testimonial from fashion retailer AllSaints:
Integrations and Add-Ons:
In order to complete a purchase using Amazon Payments, customers will need to already have or be willing to sign up for an Amazon account. All major credit cards can be used in Amazon’s system if they’re connected to a U.S. billing address.
Amazon integrates with numerous shopping carts, although that list isn’t nearly as hearty as PayPal’s. While PayPal integrates with more than 250 carts, Amazon currently supports only 23. You can view Amazon’s full list of cart providers here. Fortunately, leading shopping cart Shopify, one of our favorites, has recently been added to Amazon’s provider list.
If you’re already a seller with Amazon, using Amazon Payments as a third-party processor for your eCommerce site is a no-brainer. At the same time, Login and Pay with Amazon also offers significant advantages for sellers and organizations not currently affiliated with the company. You’ll be able to manage sales tax, shipping, and cancellations on the Amazon interface. You’ll also be guarded from fraud-related chargebacks that fit into the service’s payments protection policy. In theory, since customers won’t leave your website to complete sales your conversion rates will improve as well.
If I was a merchant looking for a third-party payment option as a backup in case my traditional merchant account hit any snags, I’d surely consider Amazon Payments. It has name recognition (although not quite as much as PayPal), an intuitive interface, and plenty of users who already have Amazon accounts. In fact, I’d most likely decide to try the service for several months, check sales reports for an uptick in transactions, and go from there.
One word of caution: integrating Amazon Payments with your website requires a little familiarity with HTML, even if it’s mostly just cutting and pasting code snippets to add the payment buttons. You’ll want to either be comfortable with editing the code yourself, or have access to a web developer who can do it for you.
Overall, Amazon Payments rates a solid 4.5 out of 5 stars, and we strongly recommend it for eCommerce merchants. Click here to sign up for Amazon Payments and see if it’s the right fit for your business.