How to Use Amazon Payments: An FAQ

Posted By Trav

How to use amazon payments

Using Amazon Payments for person to person transactions is no longer a viable strategy as of October 2014. It was a good run guys, we’re sad to see it go.

Ever since I posted my video tutorial on How to Use Amazon Payments to Meet Minimum Spend Requirements, I’ve been getting tons of emails and comments with questions about some of the specifics.

And with good reason; while it is one of the best ways to help you meet a minimum spend requirement, or to simply rack up an extra 1,000 miles for free each month, it can be a little bit confusing at first.

However, after doing it once, you’ll see just how easy it is.

For those who have yet to try it or have questions about some of the nuances, this post will serve as a guideline and hopefully clear up some of the confusion you may have.

If you’ve got a question that isn’t addressed here, please feel free to ask in the comments below and I’ll make sure to answer it!

1.  How much can I send per month?

You can send $1,000 per month from a personal account without getting charged a fee.

2.  Can I send $1,000 every calendar month or must I wait 1 month from my last payment?

It is $1,000 every calendar month.  If you send $1,000 on January 31st, you can send $1,000 again on February 1st.

3.  Why is my account capped at $500?

Your account may be capped at sending $500 at a time until you tie a bank account or a credit card to it.  Once you do this, you should be able to send $1,000 at a time.

In the meantime, simply send two different payments of $500 a few days apart.

4.  Who can I send Amazon Payments to?

You can send an Amazon Payment to anyone with an Amazon Payment account.  All you need to know is the email address they have associated with their Amazon Payments account.

5.  How can I avoid getting charged a cash advance fee by my credit card?

When sending a payment, make sure to mark the box “goods/services” every time.  DO NOT mark “Cash Advance”.

6.  Are there any credit cards I can’t use?

Not that I know of.  I have used Chase, American Express, Citi, Barclays, and Bank of America credit cards and never once incurred a fee.

7.  Will the person who receives the money have to pay taxes for using Amazon Payments?

According to Amazon, they will not issue a 1099 to the receiver of the payment unless they have completed $20,000 worth of transactions AND 200 transactions.

If you are using Amazon Payments to send 1 payment each month of $1,000 to the same person each time, that person should not receive a 1099 since they only received $12,000 and 12 transactions for the entire year.

Here is the exact wording from Amazon:

Beginning with the 2011 tax year, new Internal Revenue Service (IRS) regulations require that U.S. third-party settlement organizations and payment processors, including Amazon Payments, file Form 1099-K to report unadjusted annual gross sales or payment volume information for customers that meet both of the following thresholds in a calendar year

More than $20,000 in gross payment volume, and

More than 200 transactions.

8.  Can I use a different credit card each month?

Yep, sure can.  Just tie whatever credit card you want to use to your Amazon Payments account and then send the payment with that card.

I use a different one almost each month since I’m constantly trying to meet minimum spend requirements.

9.  Does Amazon Payments count as a purchase on your credit card and thus directly earn you points as well or does it only count towards a minimum spend total but not as a regular purchase?

Amazon Payments DOES COUNT as a purchase, and therefore, you will earn points for it.

If you send $1,000 a month, you’ll earn 1,000 points.

10.  How do they calculate the $1,000 per month? For example, can I send $1,000 to one person and then $1,000 to another?

Each personal account can SEND $1,000 per month.  You’ll only be able to send $1,000 per month, regardless of whether you send $1,000 to one person or $500 to one person, $500 to another.

If you’ve got a question that hasn’t been answered, please feel free to ask below in the comments.  I’ll be sure to respond and update this post as necessary.

(photo courtesy of bjmccray)


  1. Jack says:

    So they wont flag your account, Is it better to make two payments of $500 to one person or one payment of $1000 to one person?

    1. Jack says:

      Also, you say that you wont be charged any fees if you send $1000 and under…. but what if you want to send say $2000 or $3000 a month, what are the fees/charges? Or is that not even possible?

      1. Trav says:

        @Jack- I believe that most personal accounts, as far as I know, aren´t able to send above $1000 anyway.

    2. Trav says:

      @Jack- Either should be ok. I haven´t had a problem doing it either way.

  2. Chris says:

    I read that you can only receive $1000/month as well. What happens if you’ve already received the $1000 in a month and someone else sends you more money?

    1. Trav says:

      @Chris- To be honest, I don’t know. I only ever have received $1,000 in a month. I know for a fact you can only send $1,000, but I’m not sure about receiving. Where did you hear that you can only receive $1,000? I’d love to know if that’s true, so let me know.

      1. Chris says:

        In AP under Your Account – Edit My Account Settings – View My Account Limits. It shows your sending and receiving limits for the month. Both are $1000. I’m curious what happens is someone not knowing you’ve already received $1000 tries to send more.
        I guess it would just fail, which would be nicer than it going through and a fee being charged. :-)

        1. Trav says:

          @Chris- Hmmm, interesting. I’m assuming that it would fail, but I don’t really want to be the guinea pig and try it out!

          1. AHS says:

            I’m actually trying to send money to a person who has already received $1000 this month and AP is not allowing me to make the payment – it says “the recipient cannot receive the payment”….so there you go.

          2. Trav says:

            @AHS- Ok, good to know. So each person can only send $1000 and only receive $1000. Thanks for the data point.

  3. Gary says:

    What do you typically say in the “optional note” area each month? i.e.. For service rendered, for $1,000 worth of shoes, Direct Sales payment, ??

    1. Trav says:

      @Gary- Yeah, I just write a little note such as “here’s the money for the plane tickets, for the birthday presents, etc.”

  4. Davis says:

    Does the recipient of the $1,000 monthly Amazon Payments have to pay a fee?

    1. Trav says:

      @Davis- Nope, no one pays a fee if it’s only $1,000 a month. That’s the beauty of it.

  5. Niko says:

    Can you use your Amazon Credit card that gives you 3pts per 1 to send over 1k each month?

    1. Trav says:

      @Niko- I have no clue, actually. I’ve been able to tie any credit card I wanted to it, whether it be Chase, Amex, Citi, Bank of America, etc. so I wouldn’t see why an Amazon credit card wouldn’t work. Which one are you specifically talking about?

      1. Niko says:

        @Trav I am speaking about this one: http://www.amazon.com/gp/cobrandcard/marketing.html?source=ins7&type=P&login=NO&pr=con321 that has 3X for all purchases on amazon.com. My thinking is that you can get 3K pts for each 1k you send out

        1. Trav says:

          @Niko- Interesting. The fine print says this:

          Three Points: You will earn 3 points for each $1 of net purchases made at Amazon.com (including digital downloads, Amazon.com Gift cards, Amazon Fresh orders and Amazon Prime subscription, and items sold by third party-merchants through Amazon.com’s marketplace). Purchases made at Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.co.jp, Amazon.ca, or any other website operated by Amazon.com, its affiliates and subsidiaries are not eligible for 3 points

          Which doesn’t make it any more or less clear. Guess someone just has to try it out. Do you have an Amazon credit card already?

  6. Gail Reese says:

    This may be dumb question but here goes. How does the person receiving the money access it. Does it get deposited I their bank account, do they receive check, or what?

    1. Trav says:

      @Gail Reese- The money goes in to their Amazon account. Then, all they have to do is withdraw it to a bank account that they set up to be tied to their Amazon account. Whole process takes 2-4 days and is really simple.

  7. jason says:

    Hi I signed up for an account and it says at amazon.com can’t use my account to send money until they verify my account. Is this the norm?

    1. Trav says:

      @jason- yes, that is normal. I think the same thing happened to me back in the day.

  8. velvet says:

    Is the month a “Calendar month” or from say, Jan.4 to Feb 4?

    1. Trav says:

      @velvet- Calendar month.

  9. YM says:

    My girlfriend and I have the same credit card. So same number, but different name on each card. Can we each send $1000 or would Amazon pick up on the fact that it is the same credit card?

    1. Trav says:

      @YM- That could definitely be risky. I’m not sure I’d try that.

  10. Christopher says:

    Once I send the money to my spouse via Amazon payments, can she send it back to me via Amazon payments rather than writing me a check?

    1. Trav says:

      @Christopher- I would NOT have her send it back to you via Amazon Payments. A–>B then B—>A is not a good strategy, and you run the risk of getting shut down.

  11. Abraham says:

    Can the person I am sending $1,000 to have the same home address as me?

    1. Trav says:

      @Abraham- Yes, they could. I don’t think that’d be a problem.

  12. Shirley says:

    Hello, my question: if I set up an Amazon payment account for my spouse, and add a banking account that is actually in my name, would that be caught?

    1. Trav says:

      @Shirley- I would NOT recommend doing this. I don’t think they will allow you to tie your bank account to someone else’s Amazon account anyway.

    2. ajh says:

      I have done this with my wife and we have joint accounts. Have had 2 successful transactions so far.

      1. Trav says:

        @ajh- Thanks for the data point!

  13. JM says:

    Thank you so much for all the info!! .(love the video help) I have a question still though…. When I look at the setup acct. page,it says AP cannot be funded with a cc,what does that mean, since you can just click on the ‘goods/services’& send money link?
    Also- HOW to set up..I have amazon acct in my name- So I set up my BB as my linked bank acct-
    Then my DH creates his own AP acct,linking our joint checking acct to his name. (can this be done? the BB is me alone, everything else we have is joint.
    So then if I can do all that, then I go into my acct- use ‘goods/services’ and make a payment to DH using my cc. Which goes to HIS linked bank acct(?). then we have the freedom to use those funds as we choose? i.e. can I transfer them into my BB,or would this be a no-no?
    I am confused about which bank acct. to set up ,obviously I need a diff. bank acct. for each of use for which of us…. my ultimate goal is to fund my BB acct, as I like using it,and the amount I need it for is about right -thank you!

    1. Trav says:

      @JM- No problem, glad it helped.

      Here’s what I would suggest:

      1. Set up an Amazon Payments account for yourself. You can’t “fund” it with a credit card (meaning put money in to it), but you can send money from it to someone else using a credit card. So set up your AZ account and link a credit card.

      2. Set up an AZ Payment account for your husband, and link your joint account, as you’ve done. As long as his name is on it, that is fine.

      3. Send the payment from your account to your husband’s account, making sure to use the credit card you want.

      4. Then, once it is in his AZ payments account, just withdraw it to the joint bank account that is tied to it.

      And just like that, the money is in your bank account.

  14. Aron says:

    My friend sent me $1000 Amazon payment in April, is it safe for me to send back to him $1000 this month (May)?

  15. bocataseo says:

    hi, i have 2 questions. I want to setup my amazon payment account. I allready added cc of my wife but i want to add my bankaccount under my name. Would this be a problem?

    Another question: I want to sell amazon products on Ebay and buy products from Amazon when a buyer buys from me. What is the best way to set up amazon payment.
    I found out the best option is to use paypal debit card so that when someone pays me through paypal the debit card gets funded instantly and i can order the product from amazon.
    But what if i am not from usa, the paypal debit card wont work.What is the best option for me if i only have a cc with 2k limit per month. I need something that works with paypal so when i receive money in my paypal i can buy from amazon.Hope you can help me out

    Also i read about 1k limit on amazon payment. Does this mean i can only buy 1k products from Amazon.
    Hope you can help me out
    thank you

    1. Trav says:

      @bocastaseo- Adding your bank account should be fine, no problem at all.

      As far as the Amazon products on Ebay setup, I’m not quite sure because I don’t do that at all so I don’t want to give you wrong advice on that. Good luck!

      1. bocataseo says:

        how about the 1k limit on amazon?

  16. bocataseo says:

    Let s say i want to add my dutch bank account details and i want to later on order the payoneer debit card, is there an option to remove the bank details and fill in a usa bank details later on. Or isnt it possible to change bank details?

    1. Trav says:

      @bocataseo- Should be possible to switch bank accounts whenever you want.

  17. Kathryn says:

    I see that you say this is no longer a possibility, but looking at the Amazon payments site, it seems like it would still work. Where is the hang up? Why is it no longer working?

    1. Trav says:

      @Kathryn- I just signed in to my Amazon Payments account and there is nowhere that says “send funds”. So without that, you can’t send funds to people. If you see something that I don’t, let me know.

  18. kevin says:

    can i have 2, 3 or 4 amazon accounts so i can use several different credit cards?

    1. Trav says:

      @Kevin- This is dead now. You can’t do it anymore.

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