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This article was provided by eCom News.
Online retailers who sell on Amazon and use a payment service provider (PSP) to receive their Amazon sales proceeds, need to make sure their PSP participates in Amazon’s Payment Service Provider program. Here’s what is about to change and how you can be ready for the changes.
Last month, Amazon announced a new payment service provider policy. This policy will take effect on the 31st of May later this year.
The new policy will take effect on May 31.
Payment Service Provider program explained
According to Amazon, the Payment Service Provider program is part of its effort to make Amazon the “safest and most trusted store in the world for customers and sellers”. With the new program, the ecommerce giant wants to better take actions against (potential) bad actors that cause fraud and abuse on the marketplace.
The new policy only applies to Amazon sellers that use a payment service provider (PSP) to receive the earnings they make on Amazon. These sellers need to use a PSP that participates in the program. From the first day Amazon announced the upcoming policy change, Airwallex and WorldFirst were among the first PSPs that are participating. Now, already ten PSPs have made the switch.
The announced change seems like a good call from Amazon to crack down on payments providers. This new policy means only Amazon-approved online bank account services will be available for use in the Seller Central.
So, with this move, Amazon wants to curb the amount of bad actors. These are normally sellers who fail to pass the Seller Identity Verification due to geographical mismatch, triggered by the use of unverifiable online service providers.
A PSP could save you a lot of money
Amazon emphasizes that sellers who use a bank account (issued to them by a bank) won’t have to take any action. But for those sellers, it could still be wise to use a payment provider, as they can save them a lot of money. Some PSPs ask fees that are lower than the one raised by online marketplaces.
Check if your PSP participates
So, online sellers who sell on Amazon, should check and see if their PSP is participating in the program. At the end, probably not all PSP’s will enroll. That could be because they are not able to meet the requirements, or simply because to want to focus on other target groups that are not Amazon sellers.
Longer disbursement reserve period for non-participants
If an Amazon seller continues using a non-participating PSP after May 31, he or she will be subject to a longer disbursement reserve period of up to 21 days after the latest estimated delivery date. And beginning on July 15, Amazon will even stop disbursement to sellers using non-participating PSPs.
The choice of this date could have something to do with Amazon Prime Day 2021. The date has not been announced yet, but predictions are it will take place mid-July.
All in all, Amazon is now the first major marketplace that made such a move. But it probably won’t be the last.
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