Amazon Pay: What it is? Features, Fees, and Alternatives

As an eCommerce business owner, you dedicate your efforts toward facilitating a positive customer experience on your website.

But you likely aren't thinking about the payment process itself, which often entails manually entering credit card and shipping information—a hassle for many shoppers and an occasional dealbreaker.

Luckily, Amazon Pay streamlines that checkout process, which might ultimately boost your bottom line.

What is Amazon Pay, exactly?

Simply put, it's a payment gateway that integrates with your eCommerce platform and enables customers to check out using their Amazon account. For shoppers, that means a faster checkout process. For you, that translates into more conversions and returning customers.

Here, we'll go into greater detail about Amazon Pay so you can understand whether this service can work for your eCommerce business.

In the end, you might conclude that Amazon Pay isn't the best fit for you. In that case, we'll offer you a few alternative payment processing companies to consider, which can still help streamline your site's checkout process.

What Is Amazon Pay?

Amazon Pay is a payment gateway for eCommerce retailers. It lets customers pay for your services or goods without ever leaving your website, creating an account, or manually entering shipping and billing details. Charitable organizations can also easily enable donations by implementing Amazon Pay on their websites.

However, shoppers do need to have an existing Amazon account to use Amazon Pay on your website. The service is based on accessing the customer's billing and shipping information previously stored on Amazon. As Amazon Prime alone has more than 100 million members, it is very likely that your customers already have an account with Amazon.[1]

To summarize, a payment gateway is a software that enables the secure exchange of your customer's payment card information with your payment processor.

Other popular eCommerce payment gateway providers like Authorize.Net, PayPal, Square, and Stripe are all-in-one payment processing systems with payment gateways integrated into their services.

How Amazon Pay Can Help Your Business

As you likely know from your own online shopping experiences, many customers end up abandoning their shopping carts.

As I have already described in the post about the most common eCommerce mistakes, the main reason for cart abandonment is too long, complicated checkout process.

The main selling point of Amazon Pay is that it provides you their flawless, smooth, and seamless checkout process, which can bump your total sales by increasing conversions.

Cutting out steps that are unnecessary for the checkout process, like entering payment card data or creating an account, can be especially beneficial in boosting mobile sales.

With over 50% of online transactions made via mobile in 2021, it's crucial to make the mobile payment process as intuitive and straightforward as possible for your customers.[2].

Also, since so many consumers are familiar and comfortable with Amazon, reviewers say that being affiliated with Amazon as a payment method increases their trustworthiness, improving conversions.

With Amazon Pay, merchants can also take advantage of Amazon's fraud protection services, as well as their robust Support network.

How Does Amazon Pay Work?

Amazon Pay offers a customizable API that integrates with several eCommerce platforms. The service isn't compatible with all eCommerce platforms. Still, they do work with Shopify, Magento, and BigCommerce, which are a few of the biggest names in eCommerce providers. Still, you'll need to keep that limitation in mind when you're considering integrating Amazon Pay with your existing eCommerce website.

To integrate Amazon Pay with your site, you'll first need to choose an eCommerce platform. Then, set up an Amazon Seller account, and activate the plug-in to embed "Amazon Pay" buttons on your webshop. According to participants in the Amazon Pay case studies, the complete implementation process takes a couple of weeks.[3]

Note that only US-based online businesses are eligible for Amazon Pay. To set up your Amazon Pay account, you'll need to have the following

  1. a US business address;
  2. a US bank account;
  3. a US phone number;
  4. a US credit card.

After you register for an account, Amazon Pay will hold your funds for two weeks before releasing them to your bank account. After that, you'll still typically need to wait three to five days after the sales transaction for funds to become available.

Amazon Pay Fees

Amazon Pay fees are straightforward. As with most payment processing fee structures, Amazon Pay charges a flat fee per transaction. This flat fee contains both a transaction fee and an authorization fee. When necessary, they'll also collect tax for you.

That flat fee differs for cross-border and domestic payments:

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

And fees for charitable organizations are somewhat lower:

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

Amazon will reimburse your transaction fee in case of a refund, but they'll still keep the authorization fee. If you dispute a chargeback claim, Amazon will charge you $20. Amazon Pay charges no annual or monthly fees to use their service, which also means there are no early termination fees if you want to cancel your account.

Amazon Pay Accepted Sites

Best Amazon Pay Alternatives

Amazon Pay is not the only payment gateway on the market for eCommerce businesses. You can also consider the following two providers as alternatives, which, like Amazon Pay, are among the most reputable and popular payment gateways:


Indeed, the most popular online payment method for consumers and merchants is PayPal. They offer merchants two service tiers that you can integrate with their eCommerce sites: Payflow Link and Payflow Pro.

With Payflow Link, customers input their billing and shipping information on a PayPal-hosted template. It is compatible with many merchant accounts, is free to use, and easily integrates with more eCommerce platforms than Amazon Pay.

Payflow Pro charges an initial $99 setup fee and costs $25 per month after that. It provides merchants with a fully customizable checkout process. Regardless of the PayPal payment gateway service you choose, the provider will charge a $0.10 gateway fee per payment card transaction.

Both PayPal plans accept all major debit and credit cards and 25 international currencies. You'll also get a basic fraud protection service for free, but you do have the option to pay an extra fee for greater protection. Other add-on services, like recurring billing and buyer authentication, are also available for an additional fee.


Technically, Stripe is more than just a payment gateway - it's a fully customizable, all-in-one payment processing system. Stripe services include:

  • The ability to process most payment methods (both in-person and online) in 25 currencies;
  • A merchant account;
  • Tons of additional features.

This platform is designed especially for eCommerce businesses. However, Stripe also counts heavy-hitters like Google, Uber, and Facebook among its customers.

Other than their Customized plan—a bespoke service for businesses with large payment volumes—Stripe offers one service plan with a flat-rate payment structure:

  • $0.30 + 2.9% per credit or debit card transaction
  • $0.05 + 2.7% per in-person debit or credit card transaction
  • an additional 1% fee for international payments
  • 8% per ACH debit (with a $5 cap)

Some essential Stripe features are included for free in your plan. While others—like their Premium Support service, or Atlas, a top-to-bottom tool to help internet entrepreneurs start a business—cost additional fees.


Authorize.Net is a state-of-the-art payment gateway that enables you to accept most types of payments, including PayPal, credit and debit cards, Apple Pay, and e-checks. Plans include recurring payments, fraud prevention, streamlined customer information management, invoicing, and many additional tools.

Authorize.Net offers three service plans. You can opt for their Payment Gateway Only plan if you already have a merchant account. This is exactly what the name suggests: It's only a payment gateway without a merchant account. There's no setup fee, but you'll pay a $0.10 per transaction fee, a $0.10 daily batch fee, and a $25 monthly fee with this plan.

Suppose you don't have an existing merchant account. In that case, Authorize.Net does offer an all-in-one payment processing solution that includes both a payment gateway and a merchant account. You won't need to pay a setup fee for this plan either, but you'll still be obligated to a $25 monthly account fee. Transaction fees are bumped to 2.9% + $0.30 per payment processed with this plan.

Finally, businesses that process more than $5,000 per year can choose the Enterprise Solution - a premium service, tailored payment processing solution.

Is Amazon Pay Right for Your Business?

Amazon Pay only works for eCommerce businesses. Suppose you have a physical location and an eCommerce store. In that case, you may want to look into all-in-one payment processors that enable online and in-person transactions. Square, Clover, and QuickBooks POS are among the best, most comprehensive POS systems for small businesses. All of these providers offer a range of physical hardware that can process in-person payments, in addition to digital payment processing.

And if you only need a simple, mobile POS solution, consider PayPal Here.

They offer four types of mobile card readers that either plug into your smartphone or tablet's headphone connector or connect to your device wirelessly via Bluetooth.

So if you're an eCommerce business that's already set up with an Amazon Seller account, integrating Amazon Pay as your web shop's checkout method is a no-brainer.

Especially as Amazon Pay does not charge for initial setup nor monthly account fees.

In other words, there's no harm in testing out the service and seeing how your customers and sales performance respond.

Article Sources:

  1. "Amazon Has Over 100 Million Prime Members"
  2. "Mobile Shopping is on the Rise, But Remains Split Between the Mobile Web and Apps"
  3. "Insights"

Author: Drasko Georgijev

I'm a financial technology professional with 15+ years of experience in payment cards, eCommerce, transaction processing and switching.
From time to time, I'm sharing some helpful tips, tactics, and news about Digital Commerce and Fintech.
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