Liability Considerations for Amazon Payments

If you are an email subscriber to Saverocity you can access Password Protected posts, such as the one I wrote recently on my experience building Multiple Amazon Payment Accounts.

Whenever I share an idea that I am working on I take the risk and share the results with you, it is up to you to decide on whether the risks involved fit within your tolerance or are not worth the reward, and I do my best to ensure you are fully aware of what could go wrong.  I would add onto that statement that I expect you as an intelligent reader to take every care and responsibility with your actions and your money, and do not blindly follow me when I do something to leverage a loop hole in the system.

I just received an email from Amazon Payments updating their terms and conditions.  In addition to what I will explore here I want to share that whenever Ts&Cs are updated it means that someone is looking at the program, and changes are happening.  These are tell tale signs that things are being ‘tweaked’ and might well indicate the end is nigh.

Here are the three links I received:

• https://payments.amazon.com/help/Personal-Accounts/User-Agreement-Policies/Unauthorized-Transactions-Policy
• https://payments.amazon.com/help/Personal-Accounts/Privacy-Security/Privacy-Notice
• https://payments.amazon.com/help/Personal-Accounts/User-Agreement-Policies/User-Agreement

Terms are boring, I get it, but if you can look through them you can find dangerzones which you need to factor into your risk assessment of these programs.

Within Unauthorized Transactions Policy I noticed this (bolding mine):

Under federal law, your liability for Unauthorized Transactions is determined by how quickly you report it to us. If you tell us within two (2) Business Days (as defined below) after you learn of the compromise of your Credentials, you can lose no more than $50 if someone used your Credentials without your permission. If you do NOT tell us within two (2) Business Days after you learn of the compromise of your Credentials, and we can prove we could have stopped someone from using your Credentials without your permission if you had told us, you could lose as much as $500.

In addition, you must inform us of any Unauthorized Transaction that appears in the transaction history in your Payments Account within 60 calendar days from the date we either (1) sent a notice to you that your account statement is available or (2) you otherwise learned of the Unauthorized Transaction by accessing your account history on our site or from your bank. If you do not inform us within 60 calendar days, you may not get back any money that you lost after the 60-day period and prior to your notice to us if we can prove that we could have stopped someone from taking the money if you had told us within such time period. If a good reason (such as a long trip or hospital stay) prevented you from telling us, we will extend the time periods accordingly.

What this means, is that if your account is hacked, and someone sends money from your card to anyone else, you can lose $50 if you catch it in 2 days.  If you miss the transaction, which can easily happen if traveling you can be liable for $500 of the amount transferred.  If you leave an account dormant and forget about it, they can take the full $1000 per account per month and you have no recourse.

That is a serious consideration when deciding on how safe this program is.

Also, under the new fee schedule there is the following:

Amazon Payments offers low, predictable pricing. You only pay when you process payment for a transaction made on your website. No monthly charges, long-term contracts, or hidden fees.

Amazon Payments fees are transaction-based. Your fee is based on a percentage of the transaction amount plus a per-transaction fee. Our standard rate is 2.9% + $0.30 per transaction for transactions of $10 or more. To help lower the cost of accepting payments, we offer discounts for volume, micropayments and processing donations. See below for details on our fees and discounts.

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The fees on this page apply to all Amazon Payments products except for Amazon Flexible Payments Service. To see fees for Amazon Flexible Payments Service, click here.

Our standard transactional rate is 2.9% + $0.30 per transaction for transactions of $10 or more. For example, if a $10 transaction is made on your website, your processing fee would be $.59, according to our standard rate.

Transaction Amount	Percentage of Transaction: 2.9%	Per-Transaction Fee: $.30	Total Processing Fee
$10	$.29	$.30	$.59

My interpretation of the above is that this applies to business accounts, who would seek to use Amazon Payments in a similar manner to Paypal to receive payment for goods, however, there is no mention of the impact of personal accounts.

This is simply my own speculation, but it is possible that Amazon have used Amazon Payments in the Person-Person transaction process in order to Beta test their Paypal competitor product, and therefore can now switch on charges for all transactions.  Time will tell.

Changes go into effect on Dec 3rd, 2013.  I hope I can squeeze out a lot more $1,000 transactions by that time, Amazon, I really hope you aren’t done!