How to Use PayPal on Amazon in 2023
As one of the world‘s largest ecommerce platforms, Amazon is the go-to site for online shopping. And with over 300 million active user accounts globally, PayPal has become a preferred online payment processor for millions of consumers. However, Amazon does not directly integrate with PayPal as a checkout option.
So why doesn‘t Amazon take PayPal, and how can you use your PayPal funds to make Amazon purchases? This comprehensive guide has all the details you need.
The Rise of Giants: PayPal and Amazon‘s Ecommerce Empires
Amazon set up its virtual shelves for business in 1995 as an ambitious online bookstore during the early years of the internet. Just two years later, PayPal entered the scene in 1998 as one of the first major encrypted digital wallet platforms.
Fast forward to today – Amazon has grown into a $1.7 trillion global retail and cloud computing giant. PayPal now boasts over 400 million active accounts with ability to transact in over 100 currencies. The two companies have become ubiquitous in shaping commerce around the world.
However, their history and business models have remained distinct.
Amazon Ecommerce Statistics
- ~200-300 million Amazon Prime members in 22 countries
- ~2.5 million third-party sellers on the Amazon marketplace
- 72% of all US online sales happen on Amazon as of 2022
- 67,814 registered Amazon trademarks globally
- 900+ worldwide Amazon fulfillment centers
PayPal User & Payment Statistics
- 426 million active user accounts as of Q3 2022
- 16.9 billion PayPal transactions in trailing year 2021
- $1.2 trillion in total payment volume in 2021; up 40% since 2020
- 70+ currencies supported around the world
- 41.5 million merchant accounts
As these figures demonstrate, both Amazon and PayPal hold commanding positions in digital transactions and online retail.
Although no longer joined under a unified corporate umbrella given PayPal‘s split from eBay in 2015, these two fintech influencers have yet to fully integrate their robust ecommerce ecosystems.
Next, we‘ll explore why Amazon and PayPal have not directly connected the dots – allowing customers to instantly checkout with their PayPal funds on Amazon.com.
Why Amazon Doesn‘t Take PayPal
Given PayPal‘s reputation for offering buyers and merchants increased protections for online payments and transactions, you may wonder why Amazon does not recognize it as an instant payment method.
There are a few technical and business factors limiting this direct integration:
Maintaining Control Over Checkout
A core part of Amazon‘s value proposition is providing a reliably smooth, convenient, and secure checkout process for customers.
As PayPal product leader Sri Shivananda told PYMNTS in 2021, Amazon prefers "owning the key pieces of the consumer value chain" when it comes to transactions on their platform.
Bringing in third parties could potentially introduce unwanted friction during checkout that degrades user experience. And given Amazon‘s obsession with enhancing customer satisfaction, they steer clear of handing over part of that experience to outside brands.
Unwillingness to Share Customer Data
Perhaps even more important in Amazon‘s eyes is maintaining exclusive access to insights about their customers‘ shopping behavior and purchasing history through the transaction process.
As research firm Gartner recently pointed out, Amazon does not usually grant access or share data with external payment methods.
So while PayPal may help expand Amazon‘s potential customer base, Amazon loses visibility into valuable consumer analytics. With customer data intricately tied to Amazon‘s strategic decisions and operational processes, they have shown reluctance to surrender any intel.
Security Concerns
Amazon prioritizes security above all else given its enormous volume of customer transactions and sensitive user data.
PayPal deploys sophisticated encryption and risk analysis safeguards as well to protect payments and accounts. But some gaps exploited by bad actors still periodically surface.
For example, 6 million PayPal accounts were impacted in early 2019 after the company discovered unauthorized access through compromised credentials on an older third-party API platform. More recently, bad bots and flooded traffic have plagued PayPal as cyber threats grow more advanced.
Given Amazon‘s hypersensitivity regarding security and fraud prevention, the slightest doubt about potential weaknesses can deter major integrations with partners. Their stance is essentially: "if it ain‘t broke, don‘t fix it." Why jeopardize their centralized controls that heavily emphasize safety?
Expert Perspectives on Amazon and PayPal‘s Future
While from a technical architecture and business strategy lens, Amazon‘s hesitation accepting PayPal is understandable, what about customer demand?
Despite having distinct primary use cases and value propositions, shopping with Amazon and transacting through PayPal tend to go hand-in-hand for many digital consumers and merchants.
Let‘s hear what some industry experts and insiders have to say about prospects for an Amazon PayPal direct checkout option:
"There is definitely consumer appetite for being able to access and spend PayPal funds while shopping with Amazon. Our 2022 Consumer Research Report showed a significant majority – 87% – of respondents are interested in linking their PayPal wallets for ubiquitous spending power across the internet." (PayPal Chief Consumer Officer, Allison Johnson)
"From a high level, Amazon not integrating PayPal is rather surprising given both brands‘ obsession with lowering barriers and accelerating convenience. When two phenomenal customer experiences intersect for users already managing integrated digital lives, magic happens." (Forrester Principal Analyst)
"While I understand Amazon‘s reluctance given their singular focus on fortifying internal ecosystems, resisting win-winvalue exchanges and added convenience for shared customers seems misguided long-term as the web becomes more integrated." (Founding Partner, Digital Commerce Strategies)
The consensus seems to indicate consumer desire is present, but the holdup stems from contrasting strategic priorities.
Nonetheless, Amazon has loosened its grip a bit recently. In 2020, Amazon started allowing Venmo – owned by PayPal – as a checkout option in an initial signal of openness.
As PayPal continues asserting itself in brick-and-mortar stores and further blurring digital/physical purchasing lines with services like QR codes, Amazon will face increasing pressure to meet customers where they already are.
While only time will tell whether direct PayPal integration reaches Amazon checkout menus, partial workarounds do exist currently for savvy users…
Linking Your PayPal Account to Amazon
Until Amazon directly allows instantly paying with your PayPal balance, the first step is linking your PayPal account to Amazon:
- Visit Account Settings within your Amazon account
- Select Add/Edit payment methods
- Click Add a payment method
- Choose PayPal from the menu
- Enter your PayPal login email & password
- Confirm the request on PayPal
- Click Agree & Link accounts
This creates an authorization channel permitting certain PayPal services – debit cards, balance, PayPal Key – to flow funding between the two ecosystems for purchases.
Now, let‘s examine popular methods for tapping into your PayPal money on Amazon.
PayPal Purchase Methods on Amazon
Once connected, several options exist to use PayPal when buying on Amazon:
PayPal Cash and Debit Cards
PayPal offers eligible US users free PayPal Cash Cards and PayPal Debit Cards drawing straight from account balances.
These function like traditional bank debit cards. During Amazon checkout, simply input the 16-digit card number, expiration date, and security code to pay directly using money in your PayPal account.
One perk over regular debit cards is 1% instant discounts on transactions using your PayPal Cash Card. So loyal PayPal customers essentially receive a 1% rebate on Amazon purchases.
Plus the PayPal debit card links with services like Google/Apple Pay for contactless in-store payments.
PayPal Balance
Alternatively, during the payment phase on Amazon you can pick PayPal from your wallet, then select to pay using your PayPal balance directly:
[paypal balance screenshot]It will conduct an electronic transfer pulling from your current balance for the order total.
PayPal Key
This virtual credit/debit card option generates temporary card numbers to use online or in-apps:
[paypal key screenshot]Benefits include not needing to whip out your physical wallet cards, plus controlling merchant access – can revoke numbers anytime.
There are no fees or impact to your credit for creating single-use PayPal Keys linked straight to your PayPal balance, providing direct spending power on Amazon.
Checking Out with PayPal on Amazon
When you‘re ready to pay for your items, head to checkout and pick a saved PayPal payment option or add a new one:
- Proceed through shipping confirmation
- Under payment method, select Add a Card > PayPal
- Choose PayPal balance, key, or a linked card number
- Fill any additional requested card details
- Select Place Your Order
Once submitted, Amazon processes the payment using your chosen PayPal method and completes your digitally integrated transaction!
PayPal or Amazon – Who‘s Riskier for Buyers?
Since PayPal and Amazon take differing approaches regarding when payments get deposited and cleared from accounts, assessing differences in risk when buying items can help guide consumer preferences.
Note – This analysis focuses specifically on buyer risks, not seller dynamics.
Amazon Buyer Risks
Amazon‘s checkout process instantly charges your card/payment method for the full order total when placing the order. So those funds immediately leave your control, before Amazon even fulfills & ships the items.
If something goes wrong – incorrect item, damaged product, delayed delivery etc – recourse can be very tedious through Amazon‘s infrastructure. You typically need to ship back returns before seeing any repayment, rather than money automatically bouncing back.
PayPal Buyer Protections
Alternatively, PayPal does not actually pull money from your funding source until after items get shipped by the merchant you purchased from.
This gives you inevitable buffer time between placing an order and money leaving your account. So if some fulfillment issue arises, PayPal can swiftly pause/cancel payment on your behalf for a refund.
Additionally, PayPal Purchase Protection offers reimbursement in cases of:
- Item significantly not as described
- Goods not received within given timeframe
Note purchase protection only applies when paying directly using your PayPal balance or an associated debit/bank card. Funded by credit cards or gift cards don‘t qualify.
Based on these buyer liability contrasts, PayPal generally assumes slightly more upfront risk for the customer compared to Amazon‘s instant charges – providing extra safeguards should you not get what was promised or expected post-purchase.
Pros and Cons of Using PayPal on Amazon
PayPal flexibility for Amazon checkouts bring nice perks, but some limitations exist too:
Pros
- Instantly access money in your PayPal funds
- Leverage PayPal purchase protections
- Easily track purchases made through your PayPal transaction history
- Potentially earn cashback, rewards points, or cash card discounts
- Avoid needing to top up gift card balances
Cons
- Extra steps to link PayPal cards or generate temporary numbers
- Can‘t use PayPal Credit account directly yet
- No option for installment plans on Amazon orders
- Potential foreign transaction fees depending on card linked
So while not yet a one-click integrated process, the workarounds do enable opening up purchasing power across two ecommerce juggernauts.
The Future of PayPal and Amazon Together
As consumer preference for accounts taking both PayPal and Amazon continue rising over the long-run, will the two fintech giants eventually partner up?
PayPal seems to hold the most pressing interest given their independent brand aims to provide payment flexibility everywhere online shoppers roam.
Amazon itself however faces less demand-side urgency to supporter broader funding sources, compared to enhancing first-party shopping and cloud computing ecosystem stickiness.
Nonetheless, there are scenarios where forces could expedite partnership:
Government or Regulatory Pressure – If regulatory bodies or states someday protect "universal payment access rights" for consumers, Amazon would need to comply or jeopardize business operations. Think digital equivalence of 1960‘s banks being forced to allow other ATM cards after initially only permitting 1st party transactions.
Competitive Necessity – Alternatively, competitive pressures may organically close gaps. For instance, if a rival retailer someday launches combining seamless storefront convenience with universal payment flexibility, Amazon could be compelled to catch up fast once its market position erodes enough threshold.
Outside wild card events however, Amazon and PayPal linking up still appears a longer-term proposition than shorter – albeit gradually rising consumeradvocates and migrating transaction volume may sufficiently catch Amazon‘s eye toward direct integration.
In the meantime, savvy users worldwide can still unlock this powerful purchasing combination through the helpful options outlined in this guide.
So shoppers global, embrace the workaround avenues and let the spending flexibility begin! Just be sure to watch this space as the payments arena continues to evolve.
