Amazon Payments – Send and Receive Money with a Credit Card

Jul 28, 2014

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Today TPG Contributor Jason Steele offers insights into using Amazon Payments, a program for sending and receiving payments online with the option of using a credit card.

Perhaps you’ve heard of Amazon Payments from, the retailing giant’s web-based payments platform. Amazon recently issued a high profile announcement that it would offer a smartphone integrated with Amazon Payments to allow customers to to send and receive money and make purchases seamlessly, even though the service also remains available through a plain old web browser.

If you’ve heard of Amazon Payments through travel related sites, then you probably know that it’s a great tool not just for sending and receiving money, but for using a credit card to pay for expenses that might otherwise not earn rewards. Despite its popularity among points and miles enthusiasts, I’ve found that most people I talk to about using Amazon Payments to earn credit card rewards are confused about the details. In this post I want to refresh readers’ memories about how Amazon Payments works, and to answer some of the questions I hear asked most frequently about how the program works.

What is Amazon Payments?

Anyone who has ever bought or sold something using eBay is familiar with the concept of PayPal. People send money to others using PayPal all the time, and it usually charges a fee of about 3% for facilitating the transaction. The person sending money can fund their transaction using a bank account, credit card, or debit card.

A few years ago, Amazon decided to offer a similar service, but with a slight twist. With Amazon Payments, users can send and receive up to $1,000 each calendar month using a credit card without being charged any fees, creating the opportunity to earn credit card points for expenses that might otherwise be paid in cash or by check, like a house cleaner, piano lessons, loans between friends, etc. Money received can then be withdrawn to a linked bank account, again with no fees, so it won’t cost the recipient either.

This can effectively help you put an extra $12,000 per year on your credit card for things you already pay for anyway, making it much easier to meet minimum spend requirements for new cards, or strive for high spending bonuses.

Here is what an Amazon Payments account home page looks like.
The Amazon Payments account home page.

How to start using Amazon Payments

First, you need to create an account at If you already have an Amazon account with a login, use it to log into  Next, you’ll need to verify your email address and begin the process of linking your bank account.

To link your bank account, you’ll need to submit your login information or verify your ownership of the account by receiving two small deposits and confirming the amounts. Finally, you can add one or more credit cards that you can use to fund transfers.

The next thing you’ll need is the email address of the Amazon Payments account holder that you wish to send money to. The recipients name (as listed with will show up in a verification screen, so you have a chance to double check that it’s going to the right person. Amazon will ask what the payment is for, and you’ll want to specify “Goods/Services,” and not “Cash Advance,” since the latter may result in you being charged a cash advance fee by your credit card company.

The whole process takes just a minute or two, and transactions go through quickly. Recipients can leave money in their Amazon Payments account (like Paypal), or withdraw it to a connected bank account (according to Amazon, in 5-7 business days, but it’s often faster).

You can use your credit card to send up to $1,000 a month to another cardholder, with no fees.
You can use your credit card to send up to $1,000 a month to other Amazon Payments users, with no fees.


What happens if I try to send more than $1,000?
Amazon will only allow you to process $1,000 per month through a credit card with no fees. You can send amounts above $1,000, but you’ll be charged for it.

Do I need to enter a description of the goods and services I’m paying for?
Some people like to enter something in that field, but I never have.

If I have an Amazon Payments account in my name, can I send money using my spouse’s (or someone else’s) credit card?
Yes, it doesn’t seem to matter if the Amazon Payments account holder has the same name or address of the credit card holder used to fund the account.

If I have an Amazon Payments account in my name, can I transfer money to my spouse’s (or someone else’s) bank account?
Yes, it doesn’t seem to matter if the Amazon Payments account holder has the same name or address of the bank account you withdraw funds to.

Why is Amazon Payments absorbing the merchant fees and allowing us to manufacture spending so easily?
It seems likely that Amazon has been working on its smartphone offering for years, and Amazon Payments was planned to be part of it. Perhaps they’re using us to test the system, and its possible that the merchant fees incurred are just considered a reasonable cost to bear in order to gain traction in what is expected to be a very large market for person to person payments in the future.

Once you receive money, you can withdraw it directly to a linked bank account.
Once you receive money, you can withdraw it directly to a linked bank account.

Can I have multiple Amazon Payments accounts to circumvent the $1,000 monthly limit?
No, it’s against the rules and may result in your account being shut down.

Can you use Amazon Payments if you’re not a US citizen?
Yes as long as you have a United States Social Security number.

Will I get charged a cash advance fee by my credit card issuer?
I am not aware of any credit card that charges a cash advance fee for transactions with Amazon Payments when the payment is marked as “Goods/Services.” If you want to be extra cautious, contact your credit card issuer and set your cash advance limit to zero. Then make a small payment to confirm you’re not being charged a cash advance fee.

I understand that you can generate points or miles equivalent to $1,000 of spending each month. What else is Amazon Payments good for?
I’ve used Amazon Payments to cash out gift cards with small amounts remaining. Also, if you purchase gift cards from a place that offers additional bonuses, you can realize more points or miles from their purchase.

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