As an Amazon Pay Certified Partner “Agency Partner”: Key Considerations for Implementing Amazon Pay

Flagship LLC (Meguro-ku, Tokyo, Representative Partner: Koji Jinba) has been certified as an “Agency Partner,” an official certified partner for the ID payment service Amazon Pay.

Flagship LLC will continue to support e-commerce businesses with the implementation of Amazon Pay.

In this article, based on our experience implementing Amazon Pay across numerous first-party e-commerce sites, we explain its benefits and key considerations.

Benefits of Amazon Pay for Users

Amazon Pay has very high brand recognition, so its benefits hardly need to be explained. Nevertheless, its greatest advantage is that customers can avoid the hassle of entering their address and card information every time they shop on different e-commerce sites.

There are also customers who think, “I don't want to enter my credit card information on a site whose security management I'm not entirely confident about, but with Amazon Pay, my card information isn't stored on the site itself, so I feel safe.” The fact that Amazon Pay enables these customers to make a purchase decision is another benefit.

Benefits Expected by E-commerce Businesses

E-commerce businesses can also expect various benefits.

① Increased Conversion Rate

Amazon Pay can provide a solution for customers who previously abandoned their purchases because the amount of information they had to enter was too cumbersome. By simplifying the purchasing process with Amazon Pay, businesses can see concrete improvements in their conversion rates. The “A-to-z Guarantee for Buyers” is also one reason customers may feel comfortable completing their purchases (although awareness of this feature is not particularly high).

② Acquiring New Customers

Even when customers use Amazon Pay, businesses do not have to delegate the entire flow to Amazon. UI elements such as checkboxes encouraging customers to register as members or subscribe to newsletters can still be provided. This makes it possible to grow a new customer base without requiring customers to fill out lengthy registration forms or enter their email addresses again just to subscribe to a newsletter.

③ World-Class Security and Fraud Detection

Amazon provides world-class security. When customers use Amazon Pay, their credit card information is managed by Amazon, allowing businesses to avoid retaining card information themselves. Amazon's fraud detection and prevention technologies also operate behind the scenes, automatically generating alerts for potentially fraudulent transactions.

Key Considerations When Implementing Amazon Pay

The following are some of the key points to consider when implementing Amazon Pay.

① Implementation Cost

The cost of implementing a payment provider is naturally an important consideration. With Shopify or Shopify Plus, once the review process on theAmazon Pay side is complete, you simply enter the authentication credentials into theShopify admin to complete theAmazon Pay setup. In other words, no development work is required.

On other e-commerce platforms, customization can prevent version upgrades, and adding Amazon Pay to an outdated version can easily cost several million yen. This once again highlights the advantage of Shopify, where you can upgrade without being stuck on an outdated system or having the system become obsolete.

② Transaction Fees

The transaction fee for physical products is 4%, which is a higher rate than standard credit card processing fees. Therefore, one could argue that if customers would simply use a credit card when Amazon Pay is unavailable, adding Amazon Pay would only result in an additional cost.

Of course, this depends on the characteristics of each site's users. However, considering that implementing Amazon Pay can reduce the likelihood of cart abandonment (i.e., increase the conversion rate), it is clear from shopping across various e-commerce sites that many businesses have determined that the benefits of implementation outweigh the costs.

Furthermore, considering that the transaction fee also includes fraud detection functionality and the Amazon A-to-z Guarantee, there is another aspect to the fee structure that makes it easier to justify.

③ Missing Name Information

One operational issue is that Amazon.co.jp's member data does not separate the customer's first and last names into separate fields. Therefore, when using Amazon Pay on Shopify, if there is no space between the customer's first and last name in their Amazon.co.jp account information, it is impossible to determine which part is the last name. As a result, the data stored on Shopify may be missing the customer's first or last name. This is generally not a problem, but it could potentially cause errors in connected ERP or logistics systems, so it is advisable to check this in advance.

This behavior depends on how Amazon.co.jp stores its customer data, so it is the same regardless of whether you are using Shopify or another e-commerce platform.

④ Understanding the Difference Between Amazon.co.jp and Amazon in Other Countries

Amazon.co.jp (the Japanese version of Amazon) and international versions such as the US and EU versions do not share account information. Therefore, if you sell both domestically and internationally through the same Shopify store, customers with an overseas Amazon account may be unable to authenticate when they click the Amazon Pay button, which can cause confusion.

It is possible to implement separate controls for domestic and international users, but sites operating in both Japan and overseas need to consider the UX issue described above.

That concludes our detailed overview of Amazon Pay and its various considerations. Overall, we believe that Amazon Pay is a payment method that can increase sales when implemented rather than omitted.

To avoid being caught off guard by operational issues after implementation, make sure to review the key considerations in advance.

Flagship LLC