Amazon raised rates of its payment services on July 1st, meaning higher costs for some ecommerce customers – and if chargebacks weren’t already a pet peeve, now they’ve become quite costly for merchants using Amazon Payments. Amazon is also trying to entice merchants to try Login and Pay with Amazon by promising guaranteed growth.
US merchants who were already members of Pay with Amazon as of July 1, 2015 did receive a small measure of good news. Amazon is waiving the fee changes until February 1, 2016, leaving the upcoming holiday shopping season untouched by the new fees for those existing merchant customers.
The fee updates highlight three big revisions that took place on July 1st. A previously refundable authorization fee for processing a payment is now non-refundable. The change makes the $0.30 charge a straight revenue stream for Amazon.
A cross-border processing fee of 2.9 percent, invoked when processing a payment method issued outside the United States, rose to 3.9 percent. However, the domestic processing fee of 2.9 percent remains unchanged. Merchants with any measure of international business will be pressed to reconsider their foreign sales policies if that change represents too much of a bite into profits.
Merchants will retain the ability to dispute chargebacks happening through Pay with Amazon. However, if the disputed claim isn’t covered under Amazon’s Payment Protection Policy, the company will charge a $20 fee plus any applicable tax. Previously they did not charge a fee for such chargeback disputes.
An Amazon spokesperson noted the Login and Pay with Amazon pairs a Growth Guarantee program with the payments service. “The Growth Guarantee states that if after 30 days your business doesn’t see an increase in sales with Login and Pay with Amazon, we’ll refund your fees for the first 30 days on up to $100,000 in transactions,” he said.
Want more information about the fee changes to Amazon Payments? These FAQsmay be helpful.