I’ve noticed a flurry of announcements from the Amazon Payments team lately, so decided it was time to go have a nosy around. Here’s my initial impressions from a drive-by visit …

The first thing I noticed about the Amazon Payments website was, “What a lot they got”.  It’s big, it’s complicated, it’s highly confusing, and for anyone outside of the USA, there’s one essential piece of information that is glaringly missing from obvious view – is Amazon Payments available to merchants or buyers outside of the US?

Lots of digging around came across various snippets that say non-US buyers can pay via one or the other of Amazon’s payment systems, but by credit card only, not using any balance they have in their Amazon Payments account (see the note below the fee schedules on this page as an example).  I don’t have to tell regular readers that as a Brit-expat living in the Wild East, such geo-restrictions don’t sit well with me.  Either a user is accepted, or they’re not.  Providing a restricted service based on location is racism by proxy, and that’s not on, in my book.

So, that particular point woke up the grumpopotomus and it pretty much went downhill from there.

The fees schedule did catch my eye (as such things do) and I was briefly impressed with their tiering system with regard to source of funds (see fee schedule link above) -

Amazon FPS.

Fees are assessed on a per-transaction basis and vary depending on the payment method used and the transaction amount:

For Transactions >= $10:

• 1.5% + $0.01 for Amazon Payments balance transfers
• 2.0% + $0.05 for bank account debits
• 2.9% + $0.30 for credit card transactions. Volume discounts apply^*

For Transactions < $10:

• 1.5% + $0.01 for Amazon Payments balance transfers
• 2.0% + $0.05 for bank account debits
• 5.0% + $0.05 for credit card

For Amazon Payments balance transfers < $0.05:

• 20% of the transaction amount, with a minimum fee of $0.0025

^*Credit Card Volume Discounts

Qualified developers can apply for the following monthly volume discounts for credit card transactions:

• 2.5% + $0.30 per transaction for payment volume from $3K- $10K
• 2.2% + $0.30 per transaction for payment volume from $10K – $100K
• 1.9% + $0.30 per transaction for payment volume over $100K

Amazon Simple Pay.
Fees are assessed on a per-transaction basis and vary depending on the transaction amount. They are based on a percentage of the transaction amount plus a per transaction fee.

For Transactions >= $10:

• 2.9% + $0.30 for all transactions

Volume Discounts

• 2.5% + $0.30 for all transactions for monthly payment volume from $3k-$10k
• 2.2% + $0.30 for all transactions for monthly payment volume from $10k – $100k
• 1.9% + $0.30 for all transactions for monthly payment volume over $100k

For Transactions < $10:

• 5.0% + $0.05 for all transactions

Checkout by Amazon.
Fees are assessed on a per-transaction basis and vary depending on the transaction amount. They are based on a percentage of the transaction amount plus a per transaction fee.

For Transactions >= $10:

• 2.9% + $0.30 for all transactions

Volume Discounts

• 2.5% + $0.30 for all transactions for monthly payment volume from $3k-$10k
• 2.2% + $0.30 for all transactions for monthly payment volume from $10k – $100k
• 1.9% + $0.30 for all transactions for monthly payment volume over $100k

For Transactions < $10:

• 5.0% + $0.05 for all transactions

So I was impressed with the fees until I found the caveat about “bankruptcy plastic only” if the payer is outside the USA.

That fee schedule contains a lesson that all other payment services should take on board – the Amazon FPS cheaper rate for receiving funds held in the system, or transferred from bank.  PayPal in particular, has regularly been accused of usuristic practices for not discounting or waiving fees on inter-account balance transfers.  Perhaps Amazon’s initiative will lead them to do so, especially if the newer service gets the geographic penetration of eBay’s cash cow.

Notice how the non-discounted Amazon fees for credit card transactions are on a par with PayPal’s long-standing rates, Google Checkout’s new rates as of this year, and the elevated fees that MoneyBookers US introduced after they gained access to the eBay platform?  I don’t like to slip the abbreviation for “cart-hell” into the conversation, but if you drop the “-he” you’ll get my drift.  As a fee-playing-field, that’s just a little too level between all the largest competing services, and maybe deserves a quick inspection from the US BBB or FTC?  Even Amazon’s discount tiers align neatly with PayPal’s, as does their sub-$10 micro-payments processing fees. Hmmm?

Right moving on from fees, I found other aspects of the services that made me a little uncomfortable.   I’ve confessed up top, that this was a “drive-by” visit so I didn’t have time to dig too deep into the following, but if I were a casually browsing merchant looking for additional payment services, it could have put me off using this bunch.

On the “compare services” page (as always) there were a few disquieting revelations to goad the grumpopotomus.  In the column for the Checkout by Amazon service, in answer to the question, “Who calculates order total based on shipping rates, sales tax and promotions?”, it simply stated Amazon Payments did.  For the other two services it said the merchant did.  Whoa neddy!  My divorce from eBay, for exactly that cause, is at the Decree Nisi stage so I think you can forget the bended knee from me on that one, particularly as Checkout by Amazon only permits payment by credit card (highest fees, remember?).

It doesn’t stop there.  At the bottom of the column, it states that dispute resolution (for Checkout by Amazon) is “Through Amazon Payments section of Amazon Seller Central” … please refer to the second causal clause of the aforementioned divorce petition.  I know Amazon’s reputation is a lot better than eBay’s in this area, but frying pans and fires come to mind here.  Decision made – scratch Checkout by Amazon?

Now, what about Amazon Simple Pay and Amazon Flexible Payments Service (Amazon FPS) ?

Much better news here.  The merchant is responsible for totalling all the bits and bobs on the invoice and passing them to Amazon for payment collection.  Having done so, Amazon Simple Pay merchants are able to accept payment funded from bank balance or credit card, and Amazon FPS merchants can accept both of those and payment by funds in the buyer’s Amazon Payments account (if the buyer is in the USA only).  Ah-ha – immediate fee savings, even if not against 100% of transactions.

Both of these services also allow payments for donations, digital goods, and services rendered (snigger – stop it!), which basic Checkout by Amazon does not permit.  Additionally, for both of these, dispute resolution is by email directly between the buyer and seller – now that’s more like it, traditional buyer-seller customer service and relationships.  They also have Application Programming Interfaces (APIs) for automatic processing of payments and registering sales as paid within the merchant’s website, as opposed to the merchant-triggered datafeed-pulling of Checkout by Amazon.

At this point, it would seem cut and dried that no merchant with their own website should use Checkout by Amazon, but there’s a trade-off.

Checkout by Amazon allows use of the Amazon 1-Click and Amazon PayPhrase systems.  Simple Pay and FPS do not.  That may not seem such a big deal, but in the web developer world it is, and you should be aware of it if you pay someone to develop or maintain your website.  Amazon’s trademark protecting of the 1-Click “word” and computational process has caused untold upheaval in the website-shopping-cart development community, particularly in the open source sector, where many developers were a long way down the road to integrating HTML, XHTML, JavaScript, and other programming languages led implementations of similar functions to Amazon’s.  Several developers, of modifications for osCommerce, had to completely abandon their projects due to Amazon acquiring that trademark.

Another trade-off comes in controlling where the customer actually pays.  With Checkout by Amazon, you can configure the system to collect the payment on your own website or pass the customer through to Amazon Payments to make the payment.  With Simple Pay, it’s on the Amazon Payments website only.  With FPS it’s on your website only.

Those last trade-offs are where the real decision making must initially be made.  In particular, whether or not you have the programming skill/ resources to implement an API-driven solution, or whether you’ll need to stick with simpler html implementations in a similar manner to PayPal payment buttons.

However, good news abounds, because the official by-Amazon osCommerce plugins are available (developed by Amazon Payments) for osCommerce … and what fits osCommerce can be shoehorned into Zen-cart and many other shopping cart scripts.  Better yet, the Amazon developers actually thought about, and delivered, solutions for all three of the top osCommerce versions (MS2.2 ~ MS2.2-RC1 ~ MS2.2-RC2 / 2a) – well done guys.  The osCommerce plugins use Amazon’s Instant Order Processing Notification (IOPN) delivering the same instant gratification to customers that they are used to with the PayPal and Google offerings.

What to do?

So, even though I now know the main differences between the three Amazon Payments solutions, I am still no further forward.  The lead question, at the top of this post, still remains in place.  Can I, as a Brit living in South East Asia, open an Amazon Payments account for Amazon FPS, integrate the API plugin into my assorted physical-goods osCommerce websites, and be assured that a month down the road Amazon will not do to me what PayPal did back in 2003 (locked and froze my account without warning or right of appeal) … because I lived outside of then authorised territories.

Let’s be honest here – if I’m not eligible, then I want to know up front and I can “move along” before I fill out all of the forms, and most certainly before I begin embedding the code into my websites.  A bit of openness here would do some powerful good guys.

Anyone know the answer?

Gaz