What is Amazon Pay For Business? | Fora Financial Blog
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What is Amazon Pay For Business?
December 15, 2020
What is Amazon Pay

What is Amazon Pay For Business?

Amazon Pay is a payment option that can allow your business to accept credit and debit card payments. It makes it easy for customers to pay for their purchase because they won’t have to create an account, leave your website, or manually enter their information.

To use Amazon Pay for business, however, your customers must have an existing Amazon account so the service can access their shipping and billing details. Since Amazon is so popular in the online shopping world, there’s a good chance most of them already have an account set up.

Let’s dive deeper into how Amazon Pay works so you can determine whether it makes sense for your unique business and customer needs.

How Does Amazon Pay Work?

Amazon Pay comes with a customizable API that integrates with e-commerce platforms like Shopify and BigCommerce. If you’d like to utilize this service, you’ll be required to select one of these platforms and create an Amazon Seller account.

From there, you’ll need to embed the appropriate buttons on your website. Typically, you can expect this process to take several weeks.

It’s important to keep in mind that your business will only be eligible for Amazon Pay if it meets the following requirements:

  • The business must be based in the U.S. with a registered business address.
  • You must have a business bank account number and phone number.
  • Lastly, you’ll need to submit your business credit card information.

Once you sign up for an Amazon Seller account, be aware that Amazon Pay will hold your funds for 14 days before they distribute them into your bank account. After this period, your funds will become available within a few days.

Amazon Pay Fees

Just like other payment processors, there are costs to use Amazon Pay, and they charge fees to businesses who utilize its service. You’ll pay a flat fee per Amazon Pay transaction, which will be made up of a transaction fee and authorization fee. In some situations, you’ll be on the hook for a tax fee as well, so it’s also important to consider this.

If you’re a for-profit domestic business, you’ll owe a 2.9% transaction fee and $0.30 authorization fee. In the event you’re an international business, you’ll be responsible for a.3.9% transaction fee and $0.30 authorization fee.

You’ll pay a bit less as a charitable organization as Amazon Pay charges 2.2% transaction fee and $0.30 authorization fee for domestic entities and a 3.2% transaction fee and $0.30 authorization fee for those who are international.

While you can process refunds via Amazon Pay, Amazon will only refund your transaction fee and keep the authorization fee. In addition, you’ll be responsible for $20 if you dispute a chargeback. The good news is you won’t have to pay any annual or monthly fees to use Amazon services and can cancel your account without penalty.

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Pros of Amazon Pay

While there are many advantages of Amazon Pay for business, some of the most noteworthy ones include:

  • Easy Payment Option: If the online checkout process is confusing or time-consuming, some shoppers will look elsewhere for similar products or services. Amazon Pay simplifies payments and can lead to more conversions and higher profit margins.
  • Trusted Amazon Name: Amazon is a leader in the ecommerce world so essentially everyone has heard of them. Your customers will be more likely to complete their purchase with Amazon Pay than another payment processor with weaker brand recognition.
  • No Termination Fees: Amazon Pay is virtually risk-free to try because you can cancel the service without paying a dime. If you decide it’s not right for you, you’ll be able to move on to another option without losing much.

Cons of Amazon Pay

A few of the biggest drawbacks of Amazon Pay are as follows:

  • Amazon Account Required for Customers: Your customers won’t be able to pay with Amazon Pay unless they have an Amazon account. Fortunately, they can create a new account quickly and easily.
  • Extensive Signup Process: If you’d like to set up your online store with Amazon Pay, expect a fairly lengthy signup process. You’ll need to provide a great deal of paperwork and it’ll take several weeks to complete.
  • High Fees: The flat fees per transaction can add up, especially if you’re selling a product or service with low margins. You may be able to save money processing payments through a different platform.

Amazon Pay Alternatives

If you decide that Amazon Pay isn’t right for your business, you may want to consider these alternative options.

PayPal

Over the years, PayPal has become a staple in online payment processing. You can integrate Payflow Link or Payflow Pro with your ecommerce site. While Payflow Link is free to use, Payflow Pro charges $25 per month and an initial $99 setup fee. The major advantage of Payflow Pro, however, is the completely customizable checkout process.

Square

You can download Square on your laptop or smart device and connect to one of its external card readers. This way you may accept in-person payments. You may also use Square’s virtual terminal, which works with many e-commerce platforms to collect online payments. Square also offers an Online Store that you can use to create an easy payment experience on your website.

2Checkout

With 2Checkout, you can accept global payments without the hassle as it’s compatible with almost 100 currencies, eight payment methods, and 15 languages. 2Checkout won’t charge you any monthly or setup fees and makes it a breeze to set up recurring payments for your customers. It also offers customizable checkout options, which are mobile-friendly and branded to meet your unique business needs.

Who is Amazon Pay Good For?

If you’re an e-commerce business without any physical locations, Amazon Pay may be worthwhile. It’s also ideal if you already have an Amazon Seller account, currently sell on Amazon, and are in search of a “no frills” payment processor without setup or monthly fees.

Still unsure if Amazon Pay for business is right for your ecommerce plans? Fortunately, you can test it out with minimal risk.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].