Amazon Pay is an online payment service that gives Amazon users the ability to pay on other websites and e-commerce platforms with the payment details stored in their Amazon account. It’s a popular payment integration for businesses of all sizes and is currently supported by more than 1 million websites worldwide.

Amazon Pay allows e-commerce businesses to speed up their checkout process and expand their customer base by attracting customers who already have Amazon accounts. Customers and businesses might feel secure in using Amazon Pay to send and receive payments since the online payment service uses the same security features and fraud protection technology as Amazon.com.

This guide will explain Amazon Pay’s features, user base, and the impact it has on businesses that accept Amazon Pay as a payment method.

What’s in this article?

• How does Amazon Pay work?
  
• Where is Amazon Pay used?
  
• Who uses Amazon Pay?
  
• Benefits of accepting Amazon Pay
  
• Amazon Pay security measures
  
• Accepting Amazon Pay as a payment method
  
• Alternatives to Amazon Pay
  

How does Amazon Pay work?

Amazon Pay is a digital payment service that allows customers to pay for purchases from other businesses with the payment methods saved in their Amazon accounts. This makes the checkout process simpler and faster. Amazon Pay is primarily used for e-commerce transactions on third-party websites and apps, but Amazon has also launched Amazon Pay in a limited number of physical shops using QR code payments. Here’s a closer look at how Amazon Pay works for businesses and customers.

• For businesses: E-commerce businesses integrate Amazon Pay into their websites by enabling it as a payment method through their payment service providers (PSPs). Businesses that use Stripe for online payments, for example, can easily add Amazon Pay as a payment option. Businesses pay transaction fees to their PSP for transactions made with Amazon Pay, and these fees are typically similar to those charged for card or digital wallet payments.

• For customers: When a customer chooses Amazon Pay as their payment method on a participating business’s website, they complete the checkout process just as they would on Amazon.com: by signing in with their Amazon login details and choosing a payment method and shipping address saved in that account. Eligible purchases of physical goods are protected by Amazon’s A-to-z Guarantee, and the customer is immediately charged after placing an order.

Where is Amazon Pay used?

Amazon Pay is used internationally and is available for businesses in the US, the UK, and the following European countries: Austria, Belgium, Cyprus, Denmark, France, Germany, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and Switzerland.

Amazon Pay launched in Japan in 2018 through a partnership with local fintech startup Nippon Pay, which helped introduce the payment method in selected physical shops for the first time.

Who uses Amazon Pay?

The following types of businesses use Amazon Pay:

• E-commerce businesses: Online retailers integrate Amazon Pay into their checkout process to provide a convenient payment option for their customers.

• E-commerce platforms: E-commerce platforms such as Shopify and WooCommerce integrate Amazon Pay as a payment option for the businesses on their platform.

• Subscription services: Companies with subscription-based services such as streaming services, software, or monthly product boxes use Amazon Pay to handle recurring payments.

• Charities and non-profits: Charities use Amazon Pay to accept donations, simplifying donations for those who already have Amazon accounts.

• International businesses: Amazon Pay is useful for international transactions due to its multi-currency feature that supports 12 currencies.

• Utility companies: Some utility companies and service providers accept Amazon Pay as an option for customers to pay their bills.

Benefits of accepting Amazon Pay

Accepting Amazon Pay as a payment method creates multiple benefits for businesses, from improved conversion rates to detailed transaction insights. Here are some key advantages.

• Simplified checkouts: Amazon Pay creates a smooth checkout process that lets customers complete purchases without entering their payment details.

• Improved conversion rates: Offering Amazon Pay as a payment method can translate to more sales. Clothing retailer AllSaints saw a 34% higher conversion rate after integrating Amazon Pay, according to an Amazon report.

• Mobile-friendly payments: Amazon Pay works seamlessly on mobile devices, which supports the preferences of a growing number of mobile shoppers.

• Reduced fraud risk: Amazon covers fraudulent transaction chargebacks if a business meets its Payment Protection Policy. This lowers the risk of financial losses for businesses.

• Easy integration: Amazon Pay integrates easily with major e-commerce platforms and payment gateways. This makes implementation straightforward for businesses.

• Transaction insights: Businesses can access detailed transaction data and insights through Amazon Pay’s dashboard. This can help refine marketing strategies and shed light on customer behaviours.

• Expanded customer reach: Amazon Pay is available in multiple countries. This allows businesses to support a global audience of Amazon shoppers.

Amazon Pay security measures

Amazon Pay incorporates several security measures to protect customers and businesses. These measures guard sensitive financial information, reduce the risk of fraud, and maintain customer trust. Here’s an overview of Amazon Pay’s security measures.

• Encryption and tokenisation: Amazon Pay uses advanced encryption protocols, such as Secure Sockets Layer (SSL) and Transport Layer Security (TLS), to protect sensitive information during transmission. This ensures that customer payment data and personal information are encrypted and cannot be intercepted by unauthorised parties. Amazon Pay also uses tokenisation to replace sensitive card information with a unique identifier (token) and reduce the risk of data breaches.

• Multifactor authentication (MFA): Amazon Pay recommends that users set up two-step verification for added security. All types of MFA, including two-step verification, make it harder for fraudulent actors to take over a user’s account even if they manage to obtain the password.

• Fraud detection and prevention: Amazon Pay uses the same fraud protection technology as Amazon.com. Businesses can choose to process authorisations asynchronously to give fraud models more time to analyse transactions.

• Chargeback protection: The Payment Protection Policy guards businesses from chargebacks or disputes if their transactions meet the necessary requirements (e.g. if the transaction is for the sale of physical goods and the chargeback is labelled as an Unauthorised Payment).

• Regulatory compliance: Amazon Pay operates in compliance with international standards such as the Payment Card Industry Data Security Standard (PCI DSS), plus local regulations such as the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Amazon Pay maintains all required physical, electronic, and procedural safeguards related to the collection, storage, and disclosure of customer personal information and only collects the information necessary to complete a transaction.

Accepting Amazon Pay as a payment method

To begin accepting Amazon Pay as a payment method, businesses must first create an Amazon Pay merchant account. This can be done through the Amazon Pay website and requires providing information about the business including the legal name, address, and tax identification number. Businesses should also ensure they meet Amazon Pay’s Customer Service Policy, the requirements of which include providing customers with receipts and communicating the estimated delivery time to buyers.

Next, you can integrate Amazon Pay with an ecommerce platform or payment service provider, or integrate it directly into your website’s checkout page. If you’re using an e-commerce platform that’s set up for Amazon Pay payments, the process normally involves logging in to your platform account, finding the page where you manage your accepted payment methods, and adding Amazon Pay. To integrate with a PSP, follow the PSP’s instructions for adding a new payment method. As an example, here is how to integrate Amazon Pay with Stripe.

• Sign up for Stripe or sign in to an existing account.

• Go to the Stripe Dashboard and enable Amazon Pay. Or, if your integration requires manually listing payment methods, create a new Checkout Session and add Amazon Pay to the list of payment method types.

• For a manual integration, test its functionality by selecting Amazon Pay as the payment method and clicking “Pay”.

Alternatives to Amazon Pay

Several competitors offer similar services to Amazon Pay. Popular alternatives to Amazon Pay include:

• Apple Pay: Apple Pay is a mobile payment and digital wallet service by Apple that allows users to make payments using an iPhone, Apple Watch, or other Apple device. It’s popular with Apple users for its convenience, speed, and security, and it has advanced security measures such as Touch ID and Face ID. However, Apple Pay is only accessible to people with Apple devices, which is a more limited reach than Amazon Pay.

• Google Pay: Google Pay is a digital wallet for Android devices that facilitates quick, contactless payments with credit, debit, or gift cards stored on users’ Google Pay accounts. It’s used around the world for both online and in-person transactions and comes with a high level of security.

• Samsung Pay: Samsung Pay is a digital wallet that lets users make quick, contactless payments with their Samsung Galaxy devices. These transactions are protected by security measures including tokenisation and fingerprint, or PIN authentication. As with Apple Pay, this payment method’s user base is confined to those who use Samsung devices.