Amazon Payments is a payment service that lets you pay merchants or any other person who has an e-mail address, just like PayPal. The big difference between PayPal and Amazon Payments is that there are no fees associated with credit card payments. Yes, major light bulb. Neither sender nor recipient pays fees for payments using a credit card. That means:
- Free rewards - Send money to someone who won't abscond with it to Panama.
- Excellent way to hit minimum spend on new credit cards - Need to hit that outrageous sounding $10,000 in spending get a mega credit card bonus? No problem.
Well, there are limitations. Each Amazon account can send and receive $1,000 of payments per month via credit cards. That's $20 per month for those of you with a decent 2% back credit card. Some people have multiple Amazon accounts and have successfully charged thousands per month, though I would not recommend this. To open an account, you do have to enter your social security number, I assume as part of the Patriot act or some other anti money laundering regulation.
The best deals tend to be deals where there is a deep pocketed sponsor who is trying to buy market share, just like Microsoft tried to buy search share by sponsoring
Bing cashback, which is an extreme example. My guess is that Amazon doesn't mind you taking advantage of fee-free Amazon Payments for a while because they are trying to buy payments market share, which will in turn give them more competitive rates with banks, give them more credibility with retailers, and broaden customer adoption so that they can be a viable PayPal competitor.
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