Amazon Pay Review (Formerly Amazon Payments)
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- Date Established
- Seattle, WA
- Pay-as-you-go billing with no long-term contracts
- No monthly account fees
- Predictable flat-rate pricing
- Brand recognition
- Easy to integrate into your business website
- High processing rates will be expensive for high-volume merchants
- Numerous reports of withheld funds and account closures
- Numerous complaints about poor customer service
Amazon Pay Overview
Launched in 2007, Amazon Pay is a payment service provider (PSP) and a subsidiary of mammoth online retailer Amazon.com. 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 account. Unlike PayPal, Amazon’s payment processing is conducted inline. In other words, a customer won’t have to leave your website to complete their payment. Amazon Pay integrates with over two dozen eCommerce providers, including Magento and Shopify (see our review).
Amazon Pay is a transparent and convenient service, and Amazon Pay’s quality shows in its client list. Big-name retailers using Amazon Pay include Lenovo, Canon, and Purple.
Amazon Pay (formerly called Amazon Payments and Pay with Amazon) replaces older services Checkout by Amazon (for online sellers of tangible, physical goods) and Amazon Simple Pay (for digital products, such as ebooks or software). Amazon Local Register, a mobile payment option that used a smartphone/tablet app and a plug-in card reader similar to Square (see our review), has also been discontinued, with no replacement option being offered.
Amazon Pay is very easy to sign up for and integrate into your website. You will need an Amazon Seller account, although there doesn’t appear to be a requirement that you have to list any of your products on Amazon. It’s probably a good idea to do so anyway, as you’ll reach far more customers that way. You’ll also have to comply with Amazon Pay’s Acceptable Use Policy, which basically prohibits you from selling any products that are typically considered to be high-risk in the processing industry.
Amazon Pay is a simple way to begin accepting credit and debit cards, and the service has mostly positive reviews. When a customer completes a transaction at your store using Amazon Pay, they’ll be able to access Amazon’s popular A-to-z Guarantee. Also, customers can save time by using shipping and billing information already on file in their Amazon account when making purchases in your store, and they won’t be redirected to another site to complete the transaction.
For all these reasons, plus the fair and transparent pricing, we’re happy to give Amazon Pay a score of 5 out of 5 stars. That said, there are some downsides to the service. Customers must have already made a purchase through Amazon in the past or be willing to open a new account to complete transactions using Amazon Pay. Plus, many online shoppers still prefer to use PayPal, which remains the industry leader in payment service providers (PSPs). Like any PSP, there’s an increased risk that your account will suddenly get shut down with little or no notice to you, and customer service options aren’t as robust as you would typically receive with a traditional merchant account. Still, if you sell online, Amazon Pay should definitely make it onto your shortlist of payment processing options.
Table of Contents
Amazon Pay Review: Quick Summary
Amazon Pay offers merchants the ability to accept payments through their customer’s Amazon accounts and can easily be integrated into your business website. There are no monthly fees or long-term contracts, and the service’s flat-rate pricing offers predictability and full transparency. There are no costs to sign up, and the process can be completed online.
Products & Services
A quick note: Amazon Pay is currently available to merchants in the United States, Japan, and the EU. To use Amazon Pay, you must have an established physical presence in the country in which you are processing transactions. More specifically, you must have a street address, a bank account, a credit card associated with your street address, and a phone number based in your country of operation.
Amazon Pay offers most of the features that you would expect from a payment service provider. Features and highlights include:
- 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.
- Recurring Billing Support: Amazon Pay supports recurring payments and automatically renewing subscriptions.
- Fraud Protection Technology: This free service is the same technology used by Amazon to protect accounts from fraudulent transactions, lowering your costs and safeguarding your business. Also, Amazon Pay grants merchants a Payment Protection Policy (spelled out in the Customer Agreement), which states that merchants may waive chargeback fees for qualifying fraudulent transactions.
- Voice Solutions: Amazon Pay now allows customers to make purchases or donations through their Alexa devices. Create an Alexa Skill and add Amazon Pay to the skill to enable voice purchasing. See the Fees & Rates section below to view pricing for voice-enabled payments.
- Charitable Donations: Nonprofits can collect donations through Amazon Pay. View discounted rates for charitable organizations in the Fees & Rates section.
- Multiple Integration Options: Amazon Pay provides many ways of integrating it with your selling platform. These integrations range from plug-and-play options that are built into popular eCommerce software to custom solutions that fit the needs of enterprise businesses. You have the freedom to choose the integration that best fits your business and technological know-how.
- Amazon Seller Central: Every merchant using Amazon Pay will have access to Amazon’s dashboard, Seller Central. In Seller Central, you’ll be able to manage chargeback claims, view reports, and more. Take a look at a screenshot of Seller Central below:
Amazon Pay combines and replaces several older services that have since been discontinued, including the following:
- Amazon Payments/Pay With Amazon: These are the previous names for Amazon Pay. They are essentially the same service with identical rates and features.
- Checkout By Amazon: This was the old service that was used to sell both physical and digital products online. It has been replaced by Amazon Pay. While both services offer the same basic features, Amazon Pay features an improved, more streamlined integration with merchant websites.
- Amazon Simple Pay: This service allowed merchants to sell digital products (e.g., video games or ebooks) 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 Amazon Pay.
- 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 Local Register 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 (see our review) is an obvious alternative for merchants who need this capability.
Fees & Rates
Like PayPal and most other eCommerce-focused processors, Amazon Pay utilizes a flat-rate pricing structure. Simple and easy to understand, Amazon’s pricing schedule is disclosed in detail on its website. Price is based on the transaction type and location of the buyer. Take a look at the three categories below: purchases made online, purchases made through Alexa (voice-activated), and donations made to charitable organizations.
Web & Mobile
- 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)
Alexa Voice-Activated Purchases (Real-World Goods & Services)
- 4.0% processing fee + $0.30 authorization fee per transaction (for domestic US transactions)
- 5.0% processing fee + $0.30 authorization fee per transaction (for cross-border transactions)
- 2.2% processing fee + $0.30 authorization fee per transaction (for domestic US transactions)
- 3.2% 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 account setup fees, monthly fees, PCI compliance fees — or any other fees, for that matter. There are no contracts to sign, and therefore, no early termination fees. Amazon Pay just charges fees on the transactions you process, so you only pay when you use the service.
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 when you first start using Amazon Pay, you will have to wait a bit longer than usual to receive your funds. Amazon employs a reserve system, so when you first begin processing payments, all initial transactions will be held in Amazon’s reserve for 14 days. After that point, Amazon puts a hold on your funds for seven days, and there is disbursement scheduled for every day (e.g., on your 17th day of selling, you will receive payment for purchases made on your 9th day of selling). In the event of a chargeback, you’ll pay a $20 disputed transaction fee, plus tax. Overall, these rates are very similar to what competitors such as PayPal and 2Checkout will charge you.
An important note: Your bank account must be associated with your Seller Central account to receive funds from Amazon Pay. You’ll also need to provide a valid credit card number in the event you end up with a negative account balance. Since Amazon Pay doesn’t charge any recurring fees, this is only likely to happen if you have to issue a refund or incur a chargeback.
Contract Length & Early Termination Fee
Amazon allows you to use the Amazon Pay service without committing to a long-term contract. The 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.
If you want to cancel anyway, Amazon provides a link you can use to contact a Seller Support representative, who will close the account for you. There’s also no early termination fee whatsoever. Unlike other processors who require at least 30 days’ written notice of account closure to avoid getting 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 300 million individuals living around the globe, it’s easy for the internet giant to spread the word about services available through its site, via either referral or word of mouth. There are no hidden fees associated with Amazon Pay. As long as you take the time to read the FAQs on the website, you should have a good grasp of how the service works.
Amazon Pay also has a respectable presence on social media, with active accounts on Facebook and Twitter. Additionally, it maintains a blog and has a YouTube channel that features numerous tutorials and testimonials from merchants.
Customer Service & Support
Amazon Pay has recently consolidated its online support resources into a single Help section. From here, you can access a tremendous variety of topics ranging from how to sign up for the service to how to handle a chargeback, and much more. The Help section is divided into resources for customers and merchants, so your customers can use it as well if they have a problem with completing an order or making a payment. Documentation is also available for integrating any of the numerous third-party shopping carts that are compatible with Amazon Pay.
While the Help section of the Amazon Pay website should be your first stop if you have a problem, traditional customer service options are also available. Customer support is available via email, telephone, and live 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 support representative. I can say, however, that my experiences with sales and marketing representatives were all positive and timely. Service representatives are available every day from 5 AM until 9 PM PST.
Feedback from merchants using Amazon Pay is mostly positive, although the service does receive many of the same types of complaints that are common with payment service providers (PSPs). These issues include frequent account holds, freezes, and terminations, as well as limited customer service options.
Negative Reviews & Complaints
Amazon Pay doesn’t have a separate business profile with the BBB, and few, if any, of the 12,000+ complaints on the Amazon.com profile have anything to do with the service. Ripoff Report currently lists 31 complaints (under the old Amazon Payments brand name) that are specific to Amazon Pay. 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 about Amazon Pay to be found, we did find a few issues that were common enough to be notable, including the following:
- Frequent Account Holds, Freezes & Terminations: Users have reported Amazon for holding funds for 90 days or longer and freezing accounts without prior notice. This is a very common complaint we see with payment service providers in general. While we don’t want to disregard it, the issue is a genuinely unavoidable side effect of the business model used by these types of providers.
- Initial Funding Hold: As mentioned above, Amazon Pay’s reserve policy clearly states that funds will be held for an initial observation period of 14 days for new accounts, causing a delay in payment. After that, funds are disbursed on a seven-day cycle.
- More Expensive Than Other Options: Because Amazon Pay uses a flat-rate pricing plan, merchants who operate mid to high-volume businesses may find that the cost of using Amazon Pay is higher than using other options (such as a traditional merchant account with interchange-plus or membership pricing). However, keep in mind that Amazon Pay is on par with other payment service providers, and at low volumes, the flat-rate, pay-as-you-go processing tends to be the most favorable for merchants. Higher-volume businesses (above about $10,000 per month in processing volume) will definitely see savings with a merchant account.
- Signup Takes Too Long: A few merchants voiced frustration at the signup and setup process with Amazon Pay. They say there are too many steps involved and that the process could use some streamlining. While there is some merit to this criticism, we should point out that this signup process is far easier than what you’ll go through with a traditional merchant account provider.
Positive Reviews & Testimonials
In addition to case studies on the Amazon Pay site, there are several reports online from users who are satisfied with the payment processor. A thorough search found the following common positive attributes:
- Quick Payment Process: Since their shipping and billing information is already on file with Amazon, customers can complete orders very quickly. This convenience will hopefully increase your store’s conversion rate.
- Easy To Use: Merchants like that Amazon Pay is easy to add to their websites and that it’s easy for their customers to use.
- Name Familiarity: Customers know and trust Amazon, and most customers today already have an Amazon account set up. This name-recognition helps your customers feel more secure about purchasing from your site.
Integrations & Add-Ons
To complete a purchase using Amazon Pay, customers will need to already have or be willing to sign up for an Amazon account. Amazon supports payments via all major credit cards, debit cards, and direct ACH transfers from a customer’s bank account.
Amazon Pay offers prebuilt integrations with over two dozen major online shopping carts, including leading provider Shopify (see our review). The service also provides many other ways to integrate the payment service with a merchant’s website, including payment buttons and hosted checkout options. Look into Amazon Pay’s documentation for more information on integration options.
If you’re already a seller with Amazon, using Amazon Pay as a payment service provider (PSP) for your eCommerce site is a no-brainer. At the same time, Amazon Pay also offers significant advantages for sellers and organizations not currently affiliated with the company. You’ll be able to manage transactions, view reports, contact customer support, and more in Amazon’s Seller Central. 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.
For merchants who already have a traditional merchant account, adding Amazon Pay as an additional payment method to your site is a great option. It costs you nothing to sign up, and with pay-as-you-go billing, you won’t be committed to a long-term contract or recurring monthly fees. Amazon Pay has an intuitive interface, and plenty of users who already have Amazon accounts as well as providing superb name recognition. Amazon Pay receives an excellent score of 5 out of 5 stars, and we highly recommend it for eCommerce merchants.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.