What Is Amazon Pay? And Is It Right for Your Small Business?

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As an e-commerce business founder, you probably want nothing but the easiest and most seamless customer experience on your website. But there’s a big chance you didn’t consider the payment process hassle and how annoying it could be for your customers to have to enter their credit card details every time they check out. Fortunately, Amazon Pay comes to the rescue and streamlines the checkout process and make it much easier!

What exactly is Amazon Pay? Put simply, it’s a payment gateway that integrates with your e-commerce platform and enables customers to check out faster and easier using their Amazon credentials.

But what does that mean for you as a business owner? Good news: ultimately, it means a higher conversion rate!

In this article, we’ll go into greater detail about Amazon Pay so you can understand whether or not this service works for your e-commerce business and how you could possibly integrate it.

What is Amazon Pay

What Is Amazon Pay?

Amazon Pay is a payment gateway designed for third-party e-commerce retailers which lets customers check out for purchased products without having to create a new account, manually enter billing or shipping information, or even leave your website. In addition, charitable businesses could also use Amazon Pay to accept donations.

Customers do need to have an existing Amazon account to use Amazon Pay on your website, though, as the service automatically accesses the customer’s shipping and billing information that’s already stored on Amazon.

It’s highly likely that your customers have already used the e-commerce giant before. Amazon Prime alone has over 200 million customers, which means there’s a high chance your customers already have an Amazon account.

To refresh your memory, a payment gateway is a software application that helps you securely exchange your credit card information with your payment processing system. You can read more about what a payment gateway is and how exactly it works here. Famous examples of payment gateways for e-commerce businesses include PayPal and Authorize.Net.

Moreover, some providers are also considered to be all-in-one payment processing systems that have payment gateways already embedded in their services, such as Stripe and Square.

If you’re a MENA-based business owner, you can also check out our list of Top 10 Payment Gateways for Small Businesses in the Middle East in 2021.

How Can Amazon Pay Help Your Business?

If your own personal experience with online shopping has taught you a thing or two, it’s probably that customers are more inclined to abandon their shopping carts if the checkout process is too long. That’s why the seamless experience offered by Amazon Pay can help increase checkout speed and thus lead to more conversions and ultimately, sales.

Removing intermediate checkout steps like entering credit card details or creating a new account from scratch has proved very beneficial to increasing mobile sales, especially that a whopping 72.9% of online sales happen via mobile! 😮

It’s vital that the online payment process is as quick and intuitive as possible for your buying customers. Also, as more people are getting used to Amazon, it has been observed that affiliation with Amazon and using their payment gateways services notably increases trust in your business. This also positively impacts your sales!

Not to mention that as an online retailer, you get to make use of Amazon’s fraud protection as well as their great support network.

What is Amazon Pay

How Does Amazon Pay Work?

Amazon Pay offers an API that could be customized to integrate with many e-commerce platforms such as ExpandCart, Shopify, Magento, and BigCommerce – some of the biggest names in the e-commerce provider game.

However, it doesn’t integrate with all e-commerce platforms out there; a limitation you should consider when considering integrating Amazon Pay with your website.

To embed Amazon Pay on your website, you will need to pick an e-commerce platform, set up an Amazon Seller account, and get the Amazon Pay plug-in to start using the payment gateway on your website. According to participants in the Amazon Pay program, the implementation takes around 2 weeks.

Furthermore, right after you register for Amazon Pay, funds will initially be held for 14 days before they are transferred into your bank account. After you’ve made your first sales transaction using Amazon Pay, the typical waiting time becomes around three to five days after a purchase is made.

Amazon Pay Fees

Amazon Pay will charge you a flat fee per transaction – similar to most payment processing systems – which is composed of 2 parts; a transaction fee and an authorization fee. Taxes are also collected whenever due.

The flat fee breakdown is as follows:

  • Domestic: 2.9% transaction fee + $0.30 authorization fee
  • International: 3.9% transaction fee + $0.30 authorization fee

As for charitable organizations, the fees are slightly lower:

  • Domestic: 2.2% transaction fee + $0.30 authorization fee
  • International: 3.2% transaction fee + $0.30 authorization fee

What is Amazon Pay

In case you were filing for a refund, Amazon will be able to refund your transaction fee, but the authorization fee is non-refundable. Amazon will also charge $20 if you dispute a chargeback request.

The advantage here is that Amazon Pay doesn’t charge monthly or annual fees, so you can cancel whenever you want without fear of termination fees.

Is It Right for Your Business?

Amazon Pay is an online-only payment gateway, so if your business operates both a physical and e-commerce store, it might also be good to consider an all-in-one payment processor that would enable you to accept payments from any channel (not just online).

Some of the best POS systems that could be convenient for small businesses are Square, Clover, and QuickBooks. All of these offer both online and offline payment processing methods.

Also, if you are opting for a mobile POS, you might want to consider PayPal Here: a mobile payment solution that offers you four types of mobile card readers that could be plugged into a smartphone or tablet’s headphone jack, or even wirelessly through Bluetooth.

Conclusion:

If you are an e-commerce business that’s already subscribed to an Amazon Seller account, choosing Amazon Pay as your method for checkout payment is the go-to solution. ExpandCart also allows you the option to sync the products you have on your ExpandCart store to Amazon so you can enjoy increased visibility while being able to control everything from one dashboard.

Furthermore, since Amazon Pay doesn’t require an initial setup fee or a monthly recurring one, you could test easily out the service and see how the feedback about customer experience will be and how your sales will be affected – no strings attached.

 

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