Payments processing services ever launched and provided by Amazon

17 June 2017 is one of the largest online stores around the world. Initially, the website was designed just for book selling. However, with the growth of competitive environment and FinTech development, the company decided to expand its functionality in order to be closer to users, to meet their needs, as well as to make its service more secure. What payments processing services of the company brought it to a new level of e-commerce market and allowed it to compete with leading payment systems?

Amazon Flexible Payments Service

Amazon Flexible Payments Service (FPS) is a set of web service APIs that enables developers to accept payments on their websites. The service was launched as a limited beta in August 2007, and later in February 2009 it went public. It crucially differs from other Amazon payments products. The service allowed to “tie” a plastic card to an account on, after which there was no need for additional authorization when making payments at any online store that supported this system. Amazon FPS was suitable for selling goods or services, raising donations, performing recurring payments, and sending funds.

One of the main features of Amazon FPS was to let developers track and aggregate micro-payments into a single transaction, saving on processing costs and avoiding the need to build complex ledger functionality into their own applications. As for commissions, operations via FPS were more cost-efficient than using PayPal or Google Checkout. This is particularly noticeable in micro-payments, where the minimum fee is 0.01 cent for internal payments or 0.05 cents for transactions with a bank account or credit card. Amazon FPS supported payment through bank account debits, Amazon payment balances and credit cards including Visa, MasterCard, American Express, Discover, Diners Club, and JCB. The service was discontinued two years ago.

Amazon Flexible Payments Service

Amazon Payments Service

In June 2014, Amazon launched its own payment service, named as Amazon Payments. The introduction of “Login and Pay with Amazon” option allows consumers to use the bank card data stored on for making payments on other e-commerce websites.

Amazon Payments is quite competitive to PayPal, used by eBay and many other online stores. Utilizing Amazon Payments, consumers can pay phone bills, utilities or purchase a music service subscription, etc. It is also possible to make out an automatic payment (for websites with a monthly subscription), as well as send money transfers.

Its intermediary services are not free: Amazon receives a certain commission for each transaction. A fixed rate of a fee equals to 2.9 percent of the total transaction amount and 0.33 cents of each purchase with a value of 10.00 U.S. dollars or more. If a company with the monthly turnover exceeding 100.000,00 thousand U.S. dollars becomes a partner of Amazon, the duty rate will be lower.

Amazon Local Register

In late summer of 2014, Amazon launched its own mobile payment platform Amazon Local Register, aimed at small and medium-sized businesses. It consists of a mobile application and card reader. A point-of-sale system includes a set of cash register features: accounting and release of goods, acceptance and issuing money, cancellation of purchase. Amazon card reader is compatible with smartphones on Android and iOS platforms and is branded as Amazon Fire. To use the service it is enough to create an account on, download the application and purchase card reader at the price of 10.00 U.S. dollars.

Amazon Local Register owners get the opportunity to use mobile device as a payment terminal for quick and convenient payment by credit or debit card, as well as to monitor payment history. Moreover, in addition to the main purpose of the mobile payment system, Amazon carries out marketing research by collecting data on purchases in physical retail outlets, since 9 out of 10 sales are conducted in offline stores.

Introducing Amazon Local Register, the company delivered a severe blow to both Square and PayPal Here mobile payment systems. Until January 2016, Amazon mobile payment terminal charged only 1.75 percent, and later it increased to 2.5 percent, which is still less than 2.75 percent for Square and 2.7 percent for PayPal Here.

Amazon PayPhrase

Amazon PayPhrase user registration and payment system assumes the use of data that is already stored on at the user’s account. The client needs only to choose a unique phrase and create a four-digit password. Whenever a customer purchases at or other participating websites (including,,, and, it is necessary to enter PayPhrase and password instead of credit or debit card details and address.

The system is flexible and convenient. For example, customers can attach multiple logins to the same credit or debit card that will help parents more effectively control the spending of their children. It is worth noting that every purchase, made through PayPhrase system, is accompanied by small deductions in favor of Amazon.

However, according to analysts, the service produced no revolution in the e-market. In this regard, PayPal payment system and Google Checkout did not lose their positions. Most leading online stores accept from 4 to 7 forms of payment at once, so it is hardly worth expecting that users will abandon their accustomed payment systems and actively support Amazon PayPhrase, which, in addition, charges commissions.

Amazon PayPhrase

Amazon Simple Pay and Checkout

Amazon Simple Pay and Checkout e-payment systems provide direct money transfer from buyers to sellers.

Amazon Checkout service supports Amazon One Click technology and is a ready solution for making payments. The system is convenient for merchants, because they can use it to automate payment of taxes. It also provides an opportunity to calculate the cost of delivery, and other expenses.

Amazon Simple Pay service allows all registered Amazon users to pay for purchases on partner websites using a single personal account. The fee for utilizing these payment systems is the same. For transactions equal to 10.00 U.S. dollars, the seller pays 2.9 percent of the sum plus 0.30 cents. The commission for operations amounting to less than 10.00 U.S. dollars is 5 percent of the sum plus 0.05 cents.

The key business rivals of Amazon at e-commerce market are still PayPal and Apple Pay payment systems. Undoubtedly, at the moment the company’s payment services are unlikely to pose a strong competition for these leaders. Meantime, analysts note that the day is not far away when Amazon will be able to boast similar achievements. It is expected that in the short term Amazon payment services will become a new growth point of online retailing.


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