Amazon Payments Review

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Date Established

2007

Location

Seattle, WA

Overview:

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 making payments through 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 Merrell. 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 video overview:

Amazon Payments integrates with a variety of eCommerce providers, including Magento and Shopify. Click here for a full list of supported eCommerce providers.

The central feature of Amazon Payments is Login and Pay with Amazon, which replaces older services Checkout by Amazon (for online sellers of tangible, physical goods) and Amazon Simple Pay (for digital goods such as e-books or software). Amazon Simple Pay was discontinued on June 1, 2015, and existing users were given the option to migrate their accounts over to Login and Pay with Amazon. Checkout by Amazon is still working for existing users, but customers won’t be able to place orders after April 1, 2017. If you’re still using this service, you’ll want to migrate over to Login and Pay with Amazon well ahead of this effective sunset date. Amazon Local Register, a mobile payment option that used a smartphone/tablet app and a plug-in card reader similar to Square, has also been discontinued with no replacement option being offered.

On the plus side, Amazon Payments is easy to implement and has mostly positive reviews. When a customer completes a transaction 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 information 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, many online shoppers still prefer to use PayPal, which remains the industry leader in third-party processors. Read on for our full review.

Products & Services:

Amazon Payments has 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 email 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 HTML 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 combines and replaces several older services which have either been discontinued or are in the process of shutting down. 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 and customers won’t be able to place orders after April 1, 2017. Support for Checkout by Amazon officially ends on January 1, 2018. 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.
• 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. While Amazon has not offered a replacement service, Square is an obvious alternative for merchants who need this capability.

Fees & Rates:

Like PayPal and most other eCommerce-focused processors, Amazon Payments utilizes a flat-rate pricing structure. Simple and easy to understand, Amazon’s pricing schedule is disclosed in detail on their website. Here are the basics:

• 9% processing fee + $0.30 authorization fee per transaction (for domestic US transactions)
• 9% processing fee + $0.30 authorization fee per transaction (for cross-border transactions)

That’s it. Unlike many traditional credit card processors, Amazon won’t charge you any account setup fees, monthly fees, PCI compliance fees – or any other fees, for that matter. Contracts are month-to-month, so you won’t have to worry about early termination fees, either.

Processing fees are based on a fixed 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 & Early Termination Fee:

Amazon allows you to use the Login and Pay with Amazon service without committing to a long-term contract. Use of the service is essentially month-to-month, but without any recurring monthly or annual fees, there’s little reason to cancel your account.

Should you want to cancel anyway, Amazon provides a link to an account cancellation form on their website. There’s also no early termination fee whatsoever. Unlike other processors who require 30 days’ notice of account closure to avoid being billed for an additional month, you can close your account at any time, with no penalty.

Sales & 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 FAQs on their website, you should have a good grasp of how the service works.

Amazon Payments also has a respectable presence on social media, with active accounts on Facebook and Twitter. Additionally, they maintain a blog and have a YouTube channel that features numerous tutorials and testimonials from merchants.

Customer Service & 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. Available 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 merchants using Login and Pay with Amazon, customer support is available via email, telephone, and chat. However, you have to have already signed up for the service to use these options. Therefore, 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 & Complaints:

Amazon Payments doesn’t have a separate business profile with the BBB, and few, if any, of the 7000+ complaints on the Amazon.com profile have anything to do with the service. Ripoff Report currently lists 15 complaints that are specific to Amazon Payments. Again, however, few of those complaints are from merchants. Instead, most of them are actually filed against people trying to use the service for illegal or scam sales.

While there aren’t a lot of complaints against Amazon Payments out there, we did find a few issues that were common enough to be notable, including the following:

• Withholding Funds and Freezing Accounts – Users have reported Amazon for holding funds for 90 days or longer and freezing 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 & Testimonials:

In addition to case studies on the Amazon Payments site, there are several reports online from users who are satisfied with the payment processor. A thorough search found the following common positive attributes:

• 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 don’t want to input personal data in a new online store will likely feel more comfortable buying through the Amazon account that they already have.

Here’s a sample testimonial from fashion retailer AllSaints:

Integrations & 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 25. You can view Amazon’s full list of cart providers here. Fortunately, leading shopping cart provider Shopify (one of our favorites) is now available through Login and Pay with Amazon.

Final Verdict:

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 against fraud-related chargebacks that fit into the service’s payments protection policy. Because customers won’t have to leave your website to complete sales, your conversion rates should 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.

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Tom DeSimone

Tom loves asking tough questions and getting straight answers, so he has a lot of fun calling payment processors for Merchant Maverick to cut through their smoke and mirrors and find the real deals. He has run a full-time editorial business from his home in New York’s Hudson Valley since 2010 and could not imagine a better job. When not busy writing and keeping credit card processors honest, Tom enjoys backpacking in the mountains.

@tahmdesimone

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