What Is Amazon Pay? And Is It Right for Your Small Business?
As an e-commerce business founder, you would want nothing but to facilitate and perfect the customer experience on your website. But there is a big chance that you didn’t consider the hassle of the payment process and how annoying it could be for your customers when they check out and have to enter their credit card details for payment. Fortunately, Amazon Pay comes to the rescue and streamlines the checkout process and make it much easier.
What is Amazon Pay, exactly? Put simply, it’s a payment gateway that integrates with your e-commerce platform and enables customers to check out using their Amazon credentials.
Amazon Pay is a payment gateway that integrates with your e-commerce business to enable your customers’ checkout much easily using their Amazon credentials. But what could that mean to you and to your customers? It means less time to check out and ultimately a higher conversion rate.
Here, we’ll go into greater detail about Amazon Pay so you can understand whether this service can work for your e-commerce business and how you could possibly use it.
What Is Amazon Pay?
Amazon Pay is a payment gateway for e-commerce business owners that could let customers make a checkout for purchased products without creating a new account, or manually entering billing or shipping information or even have to leave your website. Besides, 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, as the service automatically accesses the customer’s shipping and billing information that’s stored on Amazon.
Customers will need though an Amazon account prior to using Amazon Pay, as such service will automatically access the billing and shipping information used on Amazon so that the customer doesn’t have to input them one more time. It’s highly likely that your customers have already used Amazon before as Amazon Prime alone as 100 million customers, which increases the chance that your customers already have an Amazon account.
If you ask about the meaning of a payment gateway, we could remind you: It’s a software application that helps you securely exchange your credit card information with your payment processing system. Other payment gateways for e-commerce businesses are PayPal, Authorize.Net, and other providers are all-in-one payment processing systems that have payment gateways embedded in their services, such as Stripe and Square.
How Amazon Pay Can Help Your Business?!
As you could have observed from your experience with online shopping, customers are more inclined to abandon their shopping carts if the check out process is too long for them. That’s why the seamless experience offered by Amazon Pay can help increase fast checkouts and thus more conversions that would increase your sales volume.
Removing the intermediate steps during checkout like entering credit card details or creating a new account from scratch has proved very beneficial increasing mobile sales, especially with the fact that at least 40% of online sales happen via mobile.
It’s vital that the online payment process is intuitive and quick as much 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 increases trustworthiness in your business, the thing that also could positively impact your sales. Besides, online retailers could make use of Amazon’s fraud protection, as well as their great support network.
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, which are some of the biggest names in e-commerce providers. However it wouldn’t integrate with all e-commerce platforms out there, a limitation you should consider when thinking about integrating with Amazon Pay for your website.
To embed Amazon Pay on your website, you will need to pick up an e-commerce platform, set up an Amazon Seller account, and get the plug-in to work to start using Amazon Pay on your website. According to participants in the Amazon Pay program, the implementation takes around 2 weeks.
Note also that not everyone is eligible for Amazon Pay except for U.S.-based businesses, so you will need a U.S.-based business address, a U.S.-based bank account, a U.S.-based credit card, and a U.S.-based phone number.
Furthermore, right after you register for Amazon Pay, funds will be held for 14 days before they are transferred into your bank account. After that, the typical waiting time will be around three to five days for the sales transaction funds to become available.
Amazon Pay Fees
Amazon Pay fees are simple, as it charges a flat fee per each transaction, just like the most of payment processing systems, and it’s divided into 2 parts; the first is a transaction fee and the second is an authorization fee, that’s beside taxes collected whenever due.
That flat fee breakdown is as follows:
- Domestic:9% transaction fee + $0.30 authorization fee
- International:9% transaction fee + $0.30 authorization fee
As for charitable organizations fees are noticeably lower:
- Domestic:2% transaction fee + $0.30 authorization fee
- International:2% transaction fee + $0.30 authorization fee
In case you were filing for a refund, Amazon will be able to refund your transaction fee, however, the authorization fee is non-refundable.
Amazon will also charge $20 is you dispute a chargeback request. There is an advantage here 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 only works for e-commerce businesses, so if you have a physical location as well as an e-commerce store, you may want to look into all-in-one payment processors that enable both online and in-person transactions.
Amazon Pay is for the e-commerce companies only, so If you have a brick and mortar store, you might want to consider integrating with an all-in-one payment processing entity that allows for both online and in-person payments.
Some of the best POS systems that could be convenient for small businesses are Square, Clover, and QuickBooks, where they 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 solution that offers you four types of mobile card readers that could be plugged into a smartphone or tablet’s headphone or even to be connected wirelessly through Bluetooth.
If you are an e-commerce business that already subscribed to an Amazon Seller account, choosing Amazon Pay as your method for payment checkout is the go-to solution. Also, since Amazon Pay doesn’t require an initial setup fee or a monthly recurring one, you could test out the service and see how the feedback about customer experience will be and how your sales will be affected.