What is Amazon Pay?

Amazon Pay is a powerful tool for online sellers, making checkout faster, smoother, and more secure.

For shoppers, it means enjoying the convenience of completing a purchase in just a few clicks without the hassle of encoding payment details every time. For businesses, on the other hand, Amazon Pay means fewer abandoned carts and more completed sales.

But is it the right choice for your store? And most importantly, what does it take to set it up and start accepting payments today?

What is Amazon Pay?

Amazon Pay is a digital payment service that allows customers to make purchases using their Amazon Pay account on third-party websites.

Instead of entering payment details manually, users can check out using their saved billing and shipping information from Amazon. That said, it’s one of the payment services that simplify transactions, making them faster, more secure, and hassle-free for both buyers and sellers.

The platform has seen significant adoption across various countries, with the United States leading the way. Data reveals that the U.S. accounted for 49.01% of total Amazon Pay sales, generating approximately $27.35 billion.

Germany is a far second, with $11.88 billion. Other key markets include Japan ($3.21 billion), Italy ($1.87 billion), and the United Kingdom ($1.73 billion).

With online sellers prioritizing Amazon Pay integration, this payment solution continues to be a trusted tool and a partner in boosting online sales.

How Does Amazon Pay Work?

For shoppers, using Amazon Pay is pretty straightforward:

• Selecting Amazon Pay. When shopping on a participating website, shoppers choose Amazon Pay as their payment method during checkout.​
• Logging In. They sign in using their Amazon credentials. There’s no need for additional registration, as Amazon Pay uses the information already associated with an Amazon account.​
• Completing the Purchase. Shoppers confirm their payment and shipping details, then finalize the transaction.

Transaction Types

For online sellers, meanwhile, setup may depend on what platform you’re using. Nevertheless, using this payment gateway isn’t complicated.

Amazon Pay supports multiple payment structures, allowing businesses to tailor transactions to their specific needs. These transactions include:

Immediate Charge

• How it works. Customers are charged at the moment they complete their order.
• Best for. Fast-moving ecommerce businesses where items are shipped immediately.

Deferred Payments

• How it works. Payment is authorized at checkout but only captured when a specific milestone is met.
• Best for. Businesses handling pre-orders, backorders, or buy-online-pick-up-in-store models.

Split Payment

• How it works. The total payment is divided into multiple smaller transactions.
• Best for. Custom-built orders or multi-shipment transactions.

Recurring Payments

• How it works. Customers are charged on a repeating basis, with either fixed – such as in the case of monthly payments – or variable amounts.
• Best for. Subscription-based businesses, membership programs, and pay-per-use models.

One-Off Purchase with Subscription

• How it works. A single transaction is processed alongside a subscription signup.
• Best for. Businesses selling one-time products with optional subscription add-ons.

Refunds

• How it works. Businesses can issue full or partial refunds for previously captured transactions.
• Best for. Handling returns, partial order fulfillment, or voided transactions.

Benefits of Amazon Pay

Amazon Pay offers a handful of benefits to shoppers:

• Trusted and Secure. Transactions are backed by Amazon’s security infrastructure, reducing fraud risks.
• Convenience. No need to create new accounts or enter payment details on multiple websites.
• Amazon Purchase Protection. Eligible purchases may be covered by Amazon’s A-to-Z Guarantee.
• Familiar Interface. Uses the same checkout process as Amazon, making it easy to navigate.

On the other side of the coin, here’s how the service helps online businesses grow:

Higher Conversion Rates and Lower Cart Abandonment

Data shows that 22% of shoppers abandoned their cart when the checkout process was too long or too complicated.

With Amazon Pay, customers can check out in seconds using their saved payment details, reducing friction and increasing completed transactions.

Trust and Credibility from the Amazon Brand

Drawing from the same Baymard study above, one out of 4 respondents didn’t proceed with checkout when they didn’t trust the site with their credit card information. 

Since Amazon Pay is backed by Amazon’s reputation, you can benefit from built-in consumer trust when using it.

Secure Transactions with Fraud Protection

Amazon Pay offers advanced fraud detection and chargeback protection using the same security infrastructure as Amazon.com. This technology includes:

• Fraud detection capabilities
• Charge-back controls
• Risk management processes

Mobile-Optimized Checkout

Following the term ecommerce, which pertains to trading goods and services online, there is an emerging term called m-commerce – which is trading goods and services via mobile devices.

38% of overall digital spending in the US is done through m-commerce, highlighting the importance of a mobile-optimized checkout process. That said, Amazon Pay is designed for fast, seamless mobile transactions, keeping customers engaged and reducing drop-offs.

Easy Integration with Ecommerce Platforms

The service works with major platforms like:

• WooCommerce
• Shopify
• Magento
• BigCommerce

With these integrations, you can use Amazon Pay without heavy technical work. 

Faster Payouts & Reliable Cash Flow

Amazon Pay automates payouts, ensuring businesses receive funds in a timely manner. With scheduled disbursements, merchants can manage their cash flow efficiently, reducing delays in payment processing.

How to Set Up Amazon Pay for Merchants

Check Your Eligibility

Before registering, ensure your business meets Amazon Pay’s merchant requirements, which may include location, business type, and compliance with Amazon’s policies.

Register for an Amazon Pay Merchant Account

Go to the Amazon Pay website and click on “Sign Up.” Use your existing Amazon Seller Central account or create a new one.

Provide required business details, including taxpayer information, banking details, and business verification documents.

Set Up Your Seller Wallet

The Seller Wallet allows merchants to manage transactions, process refunds, and receive payouts from Amazon Pay.

Link your bank account to receive automated disbursements based on Amazon’s payment schedule.

Integrate Amazon Pay into Your Website

If you use an ecommerce platform like Shopify, WooCommerce, Magento, or BigCommerce, install the Amazon Pay plugin. Do a test purchase to check if everything is in order.

Related content: Ecommerce Integration Strategies

Start Accepting Payments

Once the integration is complete and your account is verified, enable Amazon Pay at checkout. Customers will now have the option to pay using their Amazon credentials, speeding up transactions and improving conversions.

Amazon Pay vs Other Payment Methods

Here’s a breakdown of the most widely-used payment methods online.

Fees are a major factor when deciding which payment method to choose. That said, before making a decision, it’s best to compute the fees per payment method based on your:

• Region
• Business model
• Transaction volume
• Target audience 

Common Issues and Troubleshooting

Some users may encounter technical issues or transaction-related concerns. Here are common problems and how to fix them:

Pay Button Not Appearing at Checkout

Possible Causes

• The integration was not completed properly.
• The service is not enabled in your payment settings.

Solutions

• Verify that Amazon Pay is enabled in your ecommerce platform settings.
• Ensure that your business account is fully verified with Amazon.

Customers Unable to Complete Transactions

Possible Causes

• The billing address and the address on file are different.
• The service is not available in the customer’s country.

Solutions

• Ask the customer to update their payment method.
• Ensure that your store is configured to accept payments from different regions.

Delayed Payouts to Seller Wallet

Possible Causes

• Your banking details were entered incorrectly.
• Amazon’s standard disbursement schedule is in place.

Solutions

• Check your Seller Wallet settings and verify that your banking details are correct.
• Review Amazon’s payout schedule and expect a standard processing time.

Frequently Asked Questions

Why use Amazon Pay?

Merchants use Amazon Pay to increase conversions, reduce cart abandonment, and offer a trusted, secure checkout experience backed by Amazon’s reputation.

Does Amazon Pay charge a fee?

Yes, there is a processing fee for merchants, typically including a percentage-based transaction fee plus a fixed authorization fee per purchase. These fees vary by region and transaction type.

Who accepts Amazon Pay?

Many online retailers, ecommerce stores, and service providers accept Amazon Pay. Major platforms also support its integration, making it accessible to many businesses.

The Bottom Line

Amazon Pay has proven to be a game-changer for online sellers, reducing friction at checkout, increasing conversions, and providing fraud protection. With all these benefits, it helps merchants improve customer satisfaction while ensuring smooth transactions.

Ready to scale your online business? Reach out to AMZ Advisers to get access to a team of ecommerce experts who specialize in maximizing conversions, improving listings, and streamlining operations for success.

Author

Carla Bauto Deña is a journalist and content writer producing stories for traditional and digital media. She believes in empowering small businesses with the help of innovative solutions, such as ecommerce and digital marketing.