Amazon launches a Payment Server Provider policy

Amazon is launching a Payment Server Prover policy to reduce financial crime by online sellers, meaning that online sellers that use their platform will soon only be able to use services from a small select list of providers.

Amazon sellers will only be able to access funds through the Amazon store through official Amazon Payment Service Providers (PSPs). For those using a payment provider that’s not approved after 31 May, there could be a huge delay in receiving funds – and from 15 July, not at all.

From 15 July 2021, Amazon will cease disbursement to sellers using non-participating payment service providers, meaning no more payouts until they add a regular bank account (non-virtual bank account) or sign up with a participating payment service provider.

Currently participating Amazon PSPs include LianLian Pay, NetEase Global Pay, Payoneer, PingPong, WorldFirst, AirWallex, OFX Global Currency Account, iPaylinks, Skyee, and Zhejiang Chouzhou Commercial Bank. More are expected to be added in the future.

According to Amazon, the new PSP policy is to ‘detect, prevent and take actions against potential bad actors [to] protect customers and sellers from fraud and abuse’.

The intention is to reduce financial crime by making it much harder to commit fraud by selling products on Amazon and then fund illegal activities. For example, the Paris bombing was funded by multiple small payments delivered by PayPal.

The general move is to improve transparency and make users feel more confident that the products they are buying via Amazon. Before, financial criminals would have just closed their accounts and reopened a new one with a new virtual bank account after being shut down by Amazon.

Now with limited payment providers approved by Amazon, providers included can be involved in preventing disreputable merchants from circumventing suspension through a string of virtual bank accounts.

Impact on accountants and bookkeepers

With PSP coming into effect, it’s a great opportunity for accountants and bookkeepers to make their clients aware that these changes are coming into effect and review the payment provider and gateways they are using. This will only be relevant to clients that sell on Amazon.

Impact on sellers

Sellers will have a little bit of headache because it’s always a hassle opening an account, but it will impact their cashflow if they don’t do it because Amazon will start holding their money.

Sellers using payment providers not yet participating are recommended by Amazon to contact their provider to learn about their plans to enrol in the Payment Service Provider programme.

If they do not plan to enrol, they are advised to switch to a participating PSP or use a bank account directly issued by a bank by 31 May 2021.

No action is necessary for those using ACCS and are disbursing Amazon store proceeds to a bank account directly issued by a bank or participating PSP.

Already using Amazon approved disbursement solutions?

For those already using payments providers that have been added to Amazon’s PSP scheme, merchants and consumers won’t see any disruption and will benefit from competitive exchange rates.

Most PSPs have launched products, such as World First’s World Account, which allow users to set up international accounts to pay funds into

Why have I not seen any information about this?

Amazon is being very sensitive around this issue and has prevented accredited payment providers from publicly speaking about it. Apart from PSPs acknowledging they are pre-PSP, it will only be seen on Amazon FAQs and a few news articles.

If you, or any of your clients, are currently selling on Amazon then now is a good time to review the way in which you access your funds.

 

Noel Guilford, Principal at Guilford Accounting
Noel Guilford is the principal of Guilford Accounting a small business accountancy practice specialising in advising owner-managed businesses on current accounting, finance, and tax matters. You can reach him via email at noel@guilfordaccounting.co.uk or by phone at 01244 660866. He is the author of the 'Figure it out - an entrepreneurs guide to understanding your business numbers' which you can obtain by visiting guilfordaccounting.co.uk.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ His latest book, How to Build a Successful Business' will be published in 2018.

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