Finance, Review

Amazon Pay for Merchants & Customers – Register, Annual Fees, Alternatives

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The popular Amazon Pay always produce better results for mostly United States-based online-only businesses, and we advise you to carefully review all their reserve policies. But first, what is Amazon Pay? It is an online payment processing service that allows online customers to make use of their Amazon account information to pay for goods and services on various e-commerce websites. Just like other payment portals, the Amazon Pay integrates its services with Amazon.com, Shopify, BigCommerce, Magento and other e-commerce platforms to help sales companies as well as other merchants to complete shopping checkout process for online buyers.

In addition, AmazonPay services is among the best choice for online-only merchants that don’t want volume discounts or custom payment plans. On the other hand, if you’re a merchant that needs this online payment support for a wider range of payment methods or for in-person transactions, consider competitors/Amazon Pay alternatives like Square, Stripe or PayPal. Also, you can find a dedicated point-of-sale (POS) system.

Pros ofs of Amazon PayCons of Amazon Pay
1. Amazon Pay is very Easy and trustworthy for customers who already have an existing Amazon account.
2. The service Supports global customers and currencies.
3. No setup or monthly fees; pay only per transaction.
4. Customers can place and track orders using Alexa voice integration.
1. Amazon Pays’ Reserve policy delays payouts, most especially for newer accounts holders.
2. There’s no in-person payment support.
3. It has no volume discounts or custom packages for merchants.

Deciding factors

Processing ratesOnline and mobile payments: 2.9% plus 30 cents per transaction. Alexa voice payments: 4% plus 30 cents per transaction.
Accepted payment methodsCredit and debit cards (Visa, Mastercard, Discover, American Express, Diners Club and JCB).
CompatibilityIt integrates with e-commerce platforms like Shopify, WooCommerce and BigCommerce. It is not compatible with some of NerdWallet’s favorite e-commerce website builders like Square Online, Squarespace and Wix.
Contract lengthNo set contract length; you pay per transaction.
Payout timingFunds usually take 3-5 business days to appear in bank accounts. Those held “in reserve” may take longer.
Customer supportEmail, phone and live chat support.

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How does Amazon Pay work?

Amazon Pay for Online merchants

For a mercant to add Amazon Pay service to your website, they must have an Amazon Seller account. After that, you’ll also need to get a plug-in or html source code and embed it to your e-commerce platform. The Amazon Pay solution offers direct links to setup connections to more than 20 partner e-commerce platforms.

As a first time user/merchant, you can follow these steps to get started with Amazon Pay as a merchant:

  1. First you’ve to setup an Amazon Seller account successfully. Now, for you to do this, you’ll need to provide your biodata such as full name, residential address, National ID and required bank, credit card and tax information.
  2. The second step is to choose carefully and configure Amazon Pay as a payment system in your e-commerce platform’s settings.
  3. Thirdly, you must tick the ‘box’ to agree to payment and security policies from both Amazon Pay and your e-commerce platform.
  4. Next is to simply enter your credentials and configure settings so that your e-commerce site can talk to Amazon Pay.
  5. After that, you can now add the Amazon Pay button to your checkout process with a plug-in or custom code.
  6. Lastly, its time to test-run the payment process to make sure everything is working correctly before you accept real payments.

Generally, Amazon Pay processes payouts on a daily basis, but it can 3-5 days for funds to reach your bank account. if you change your bank information at any time, there will be a one-time three-day payment hold before disbursement.

Notice that some payments from your customers may also be subject to Amazon Pay’s reserve policy. As of now, the payment service reserves all payments to all new merchant accounts for 7days after the transaction. In the long run, after you make use of the platform to receive payments for about 6 months, you’ll be eligible for a less-restrictive “reserve tier.”

How to Register Amazon Pay Merchant Account

Here’s an Amazon-created tutorial about how to register for an Amazon Pay merchant account, which may provide a helpful look at the interface and process. This guide is intended for merchants that want to integrate with Amazon Pay for handling one-time payments for purchases made from their website, but we offer other integration options, too.

You need to perform the following steps before beginning your integration:

  1. Sign up for an Amazon Pay account (or provision an existing account) from the Amazon Pay website; https://pay.amazon.com/us/merchant. An Amazon Pay account provides Amazon with your payment and tax information, application information for reporting, and a Merchant ID (Seller ID) for signing button and widget requests.

    To get started quickly, you can also create a developer account that can only access the Sandbox environment and complete registration later: US, EU (FrenchGermanItalianSpanish), UKJP.
  2. Create a new Amazon Pay application (video reference is available on youtube).
    • Login to Seller Central and select Integration > Integration Central from the navigation bar on the top-left side.
    • Under the Manage client ID/store ID(s) section, click on Create new client ID/store ID, and enter information about your application.
    • When you save changes, you receive the Client ID and Client Secret needed for authentication.
  3. Set up an Amazon Pay Sandbox test buyer account. You will use the Sandbox to conduct an end-to-end test of your integration before going live. For details, see Setting up an Amazon Payments Sandbox test account.
  4. Obtain an SSL certificate. Your server is required to have a valid SSL certificate issued by a trusted Certificate Authority. Note: When working in a “localhost” environment, an SSL certificate is not required. For more information, see SSL certification.
  5. Gather your credentials. You can find the following credentials in Seller Central on the Amazon Pay Integration Settings page (Integration > MWS Access Key):
    • Merchant ID (seller ID)
    • MWS Access Key and MWS Secret Key
    • Client ID and Client Secret

Amazon Pay Website Integration Options

Option 1:

  • Set up one-time orders only (not recurring payments)
  • Maintain complete control of the checkout experience on your site
  • Set up API-based transaction management

Option 2:

  • Set up for recurring payments (subscription orders)
  • Maintain complete control of the checkout experience on your site
  • Set up API-based transaction management

New Option 3:

  • Use an ecommerce provider (also known as a solution provider) to manage your buyer’s transactions

New Option 4:

  • Use a tool to generate an Amazon Pay button
  • Offer flat-rate tax and shipping options
  • Manage your orders using only the Payment Management Dashboard in Seller Central
  • Avoid API requests

Amazon Pay for customers

When customers check out, they can use the Amazon Pay button to securely populate address and payment information from an Amazon account. You can also build and offer an Alexa skill to start accepting Amazon Pay voice orders from customers with Alexa devices.

Is Amazon Pay free?

Amazon Pay charges merchants per transaction in the U.S. There are no setup fees, monthly fees, annual fees, termination fees or hardware items to purchase.

  • Online and mobile payments: 2.9% plus 30 cents per transaction.
  • Alexa voice payments: 4% plus 30 cents per transaction.
  • For charitable organizations: 2.2% plus 30 cents per transaction.

Cross-border payments made with cards that are issued outside of the U.S. incur an extra 1% fee. If you process a refund, Amazon Payment refunds you your percentage-based transaction fee, but keeps the 30-cent authorization fee. It charges $20 (plus tax) if you dispute a chargeback claim.

Benefits of Amazon Pay

Amazon’s brand.

Amazon is one of the world’s most valuable brands, according to brand consulting company Kantar’s BrandZ rankings. Most of your customers will recognize and trust the Amazon name, which could increase conversions.

Amazon Prime has over 200 million members globally.

Many of your customers will already have an Amazon account, so they can check out in fewer steps.

Amazon handles secure payments and disputes.

Customers can be confident that their payment details are secure and any issues with their purchase will be resolved through the Amazon Pay A-to-z Guarantee, which provides refunds in cases where packages are late, damaged or not delivered.

Integration can be quick and easy.

Many e-commerce platforms, such as BigCommerce, Magento and Shopify, have out-of-the-box plug-ins to get Amazon Pay working in just a few clicks.

Drawbacks

1. Reserve policies can delay payouts.

For new users, Amazon reserves 100% of funds for seven days to handle disputed transactions. Sellers can graduate to a less-restrictive “reserve tier” by completing at least 100 orders and maintaining an order defect rate below 1%. The order defect rate is calculated over the course of a 60-day period and includes the percentage of orders that had negative feedback, had A-to-z Guarantee claims (refunds) and credit card chargebacks.

2. For those without Amazon Seller accounts, sign-up can take a while.

If you already have an account, this isn’t an issue. But if you don’t, getting set up will be more time-consuming.

3. Some e-commerce platforms are not integration partners.

Amazon Pay does not partner with some major e-commerce platforms that offer their own competing payment services, such as Squarespace, Square Online and Wix.

4. Processing fees can add up if you sell at high volumes.

Amazon Payment doesn’t offer volume discounts. If you sell at high volumes with relatively low margins, you might be better served by a competitor like Stripe that offers volume-based pricing.

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Amazon Pay Alternatives

1. Authorize.Net

Pricing: 2.9% plus 30 cents per transaction and $25 per month for the All-in-one plan; 10 cents per transaction plus 10 cents per day (batch fee) and $25 per month for the Payment gateway only plan. 

Overview: Authorize.Net offers both an all-in-one plan similar to Amazon Pay and a “payment gateway only” plan, which provides you with a portal for accepting payments online. Additionally, it allows you to use a separate vendor for your merchant account, a special business bank account used to access funds from credit and debit payments. The solution offers specialized services for larger businesses that process more than $500,000 per year.

2. Stripe

Pricing: 2.9% plus 30 cents per online transaction; 2.7% plus 5 cents per in-person transaction.

Overview: Stripe is an all-in-one payment processing system that supports a wide range of global payment methods for both online and in-person payments. One of its biggest selling points is its huge range of customization options, which offer a lot of flexibility to set up your checkout process exactly the way you want it, as long as you have the technical know-how to make it work.

Stripe’s per-transaction fees for online credit and debit card payments are the same as Amazon Pay. It also offers digital wallet payment options like Apple Pay and Google Pay, along with ACH, in-person payments through Stripe Terminal and several “buy now, pay later” options. The platform has customized pricing packages “for businesses with large payments volume or unique business models,” according to the website.

3. PayPal

Pricing: 

  • 2.29% plus 9 cents for in-person transactions.
  • 3.49% plus 9 cents for manual entry card transactions.
  • 3.49% plus 49 cents for invoicing transactions.

Overview: PayPal has product offerings for just about any kind of payment you might want to accept, including some that Amazon Pay does not support. For example, PayPal supports Venmo (a PayPal subsidiary), its Zettle point-of-sale system and QR codes. PayPal also offers easy integration with a lot of e-commerce platforms. If you use a platform that Amazon Pay does not support, like Squarespace, Wix or Square Online, it could be worth looking into PayPal payment integration instead.

If you’re only looking to accept online payments, though, Amazon Pay might offer a better deal since it carries lower per-transaction fees than PayPal Checkout.

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Amazon.com Accepted Payment Methods

Amazon.com accepts a variety of payment options, including credit and debit cards.

The following payment methods are available for use:

  • Visa (including the Amazon Rewards Visa Signature Card)
  • Amazon Store Card
  • Amazon Secured Card
  • MasterCard/EuroCard
  • Discover Network
  • American Express
  • Diner’s Club (U.S. billing addresses only)
  • JCB
  • NYCE
  • STAR
  • China UnionPay (credit card only)
  • Visa, MasterCard, or American Express prepaid credit or gift cards

You can add a completely new payment card or change your existing payment details, without having to place an order, in your Amazon Wallet.

You can also use Amazon Gift Cards to pay for your order.

Note:

  • You can split payment between one of the accepted credit or debit cards and an Amazon.com Gift Card, but you can’t split payment among multiple cards.
  • We accept Flexible Spending Accounts (FSA), Health Savings Accounts (HSA) (U.S. billing addresses only) for the purchase of FSA or HSA eligible items.
  • SNAP EBT cards are accepted as payment methods for valid cards from participating states. For more information, visit www.amazon.com/SNAP. EBT Cash benefits are not available as a payment method.