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Amazon Pay allows customers to check out on your e-commerce site using the information already stored in their Amazon accounts. Amazon Prime alone has over 200 million members worldwide, so it’s likely that your customers are already set up to pay via these accounts. The streamlined checkout process could mean more conversions and fewer abandoned carts on your site. With no fees for setup, maintenance or cancellation, it’s easy to get started, especially if you’re already set up with an Amazon Seller account.
Amazon Pay's flat processing rates are competitive and easy to understand. However, its reserve policy delays some payouts, and it lacks volume discounts or custom plans you might find from other providers. It also works for e-commerce businesses only; there is no support for in-person payments.
Pros and cons
Easy and trustworthy for customers who already have an Amazon account.
Reserve policy delays payouts, especially for newer accounts.
Supports global customers and currencies.
No in-person payment support.
No setup or monthly fees; pay only per transaction.
No volume discounts or custom packages.
Customers can place and track orders using Alexa voice integration.
For web and mobile payments, 2.9% plus 30 cents per transaction, plus an additional 1% for "cross-border" transactions to charge a card issued in another country.
For Alexa voice payments, 4% plus 30 cents per transaction, plus an additional 1% for cross-border transactions.
Accepted payment methods
Credit and debit cards:
The Amazon.com store card is available for use with some merchants, but not all. Note that Amazon.com gift cards are not accepted through Amazon Pay.
Amazon Pay integrates with many e-commerce platforms, including:
Amazon Pay is not compatible with several other NerdWallet favorites — mostly those that offer their own payment gateways — such as Square Online, Squarespace and Wix.
No set contract length; you pay per transaction.
Amazon Pay processes payout disbursements daily. Payments generally take three to five business days to appear in bank accounts. However, the service holds certain funds "in reserve" according to its reserve policy. This could significantly delay some payouts.
Email, phone and live chat support are available.
How does Amazon Pay work?
How to set up Amazon Pay
To add Amazon Pay to your website, you’ll need to have an Amazon Seller account and embed a plug-in or some code on your e-commerce platform. Amazon Pay offers links to setup materials for more than 20 “partner” e-commerce platforms, many of which offer pre-built integrations, or at least simplified setup processes.
In general, follow these steps to get started:
Establish an Amazon Seller account. You’ll need to provide your name, address, ID and required bank, credit card and tax information.
Select and configure Amazon Pay as a payment system in your e-commerce platform’s settings.
Agree to payment and security policies from both Amazon Pay and your e-commerce platform.
Enter credentials and configure settings so that your e-commerce site can talk to Amazon Pay.
Add the Amazon Pay button to your checkout process with a plug-in or custom code.
Test the payment process to make sure everything is working correctly before you accept real payments.
How customers use Amazon Pay
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.
Getting paid with Amazon Pay
Amazon Pay processes payouts daily, but it will take three to five days for funds to show up in your bank account. There's also a one-time three-day payment hold before disbursement following a change in bank account information.
Some of your payments may also be subject to Amazon Pay’s reserve policy. For new sellers, the payment service reserves all payments for seven days after the transaction. After using the platform for at least six months, you're eligible for a less-restrictive “reserve tier.”
Amazon Pay reserve tiers
Reserve Tier I
All accounts with fewer than 100 completed orders. Accounts with 100+ orders that do not meet higher-tier criteria.
100% of funds received for processed transactions for seven days
Any funds for unresolved disputes, such as chargebacks or claims under Amazon Pay’s A-to-z Guarantee.
Reserve Tier II
Accounts are upgraded to Reserve Tier II automatically when they meet all of the following criteria:
Or, you can apply for an earlier upgrade after meeting these tougher criteria:
Whichever is higher:
Reserve Tier II-Plus
Accounts are automatically upgraded to Reserve Tier II-Plus by meeting the following criteria:
Accounts are downgraded back to Reserve Tier II if the order defect rate rises above the 1% average threshold.
Any funds for unresolved disputes, such as chargebacks or claims under Amazon Pay’s A-to-z Guarantee.
What does Amazon Pay cost?
Amazon Pay charges per transaction in the U.S.; there are no annual or monthly fees or setup fees, and no hardware to buy. Each transaction has a flat “authorization fee” and a percentage-based “processing fee”:
For web and mobile payments, 2.9% plus 30 cents per transaction.
For Alexa voice payments, 4% plus 30 cents per transaction.
Fees for charitable organizations are slightly lower: 2.2% plus 30 cents per transaction.
Cross-border payments, which are charged to payment methods issued outside of the U.S., incur an extra 1% fee.
Unlike some competitors, volume discounts and customized pricing models are not available for Amazon Pay in the U.S.
If you process a refund, Amazon Pay will refund you your percentage-based transaction fee, but keeps the 30-cent authorization fee. Amazon Pay also charges $20 (plus tax) if you dispute a chargeback claim.
There are no early termination fees if you want to cancel your account.
Benefits of Amazon Pay
Amazon's brand is trusted. Amazon is the world's most valuable brand, according to brand consulting company Kantar's BrandZ rankings. Most of your customers will recognize and trust the Amazon name, which could increase conversions.
Customers already have Amazon accounts. 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 of Amazon Pay
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.
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.
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.
Processing fees can add up if you sell at high volumes. Amazon Pay 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.
Alternatives to Amazon Pay
Flexible merchant account arrangements
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 and 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 all-in-one plan has the same per-transaction rates as Amazon Pay — 2.9% plus 30 cents per transaction — but there's also a $25 monthly fee. If you prefer Authorize.Net's services or selection of supported methods, you might find that added fee worthwhile.
The payment gateway-only plan has very low transaction fees: just 10 cents per transaction, plus a 10-cent daily batch fee. There is also still the $25 monthly fee. Depending on what you would pay for a separate merchant account, the low transaction fees might help you save money overall.
Authorize.Net also offers specialized services for larger businesses that process more than $500,000 per year. The Enterprise level has "tailored pricing," so you will need to contact the sales department at Authorize.Net to figure out how your pricing would compare to Amazon Pay.
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 a 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: 2.9% plus 30 cents per online transaction. Stripe also offers other payment options, such as wallets like Apple Pay and Google Pay, ACH, in-person payments through Stripe Terminal and several "buy now, pay later" platforms. The platform offers customized pricing packages "for businesses with large payments volume or unique business models," according to the website.
Accept any kind of payment
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, social media listings, QR codes and its own buy now, pay later offering. (Amazon has launched Amazon Pay Later, a buy now, pay later service in India, but it is not available in the U.S.)
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. PayPal charges higher fees than Amazon Pay for online payments, generally 3.49% plus 49 cents per online transaction in the U.S.