Sending Money to Wine Friends with Amazon Payments

When taking advantage of wine deals it's often advantageous to join forces with others to reduce shipping costs and/or share winery allocations.

In doing so we create a situation where we need to settle up financially. Months often go by before the actual wine arrives and exchanges hands but in the meantime you need to float the costs. This is usually manageable  but it's preferable to settle up financially sooner rather than later.

Mailing a check is a nuisance. Who wants to take the time to write a check out, find an envelope and a stamp and get it out the door? Bill pay might work but seems a little clunky too.

I've used PayPal for this a few times, but they make it hard to understand when fees will be charged and you can't use a credit card without paying a service charge.

Enter Amazon Payments

I've been doing some experimentation with credit card signup bonuses lately (270,000 miles and points baby!) and one of the borderline shady techniques folks use to generate spend on cards is to send money to a relative or trusted friend using Amazon Payments. Transactions are limited to $1,000 per sender per month but it can be a quick and easy way to meet a $1,000 minimum spend to get a signup bonus.

That's not the intended use model.

The intended use model is to make it easy to send money to friends.

How it Works

Almost everyone has an Amazon.com account at this point, right? If not, sign up for one.

Step 1: Visit the Amazon Payments website

Go to: http://payments.amazon.com

Step 2: Create an account

At the top right of the page click "Create Account".
Sign in with your Amazon.com credentials.
Complete the form and submit.
Wait until you receive an email confirming your email address.
Confirm your email address to complete the application process.

Step 3: Wait for account to be verified

If you try to send or receive money right away you'll may get a message like this:

"As a result of changes to federal regulation, Amazon Payments is required to verify your identity. This functionality is temporarily disabled, pending verification of your information."

You need to wait for your account to be verified. A little while later you should receive an email saying "Your Amazon Payments account has been verified". This can take a minute or a few hours. You should now be able to send and receive money. You probably already have credit cards associated with your Amazon account but if you don't you can add them while you're waiting.

Step 4: Turn on "Accept requests for payment"

This step is important and non-obvious. By default, accounts don't allow requests for money. So when your friend sends you a payment request it'll say something like:

"The person you are requesting payment from is not accepting payment requests at this time. Please contact them first."

To remedy this situation visit your Amazon Payments account page, click "Edit My Account Settings" and then "Change my security settings". If "Accept requests for payment" is off, click Edit and turn it on. Your friend should now be able to send you a request for money.

Step 5: Link a checking account

If you plan to receive payments you can link a checking account so you can transfer the money friends send you to your checking account. You can leave the money in your account and pay for goods on Amazon or transfer money to friends. But you'd be better off getting cashback/points/miles from a credit card than parking the money there.

It takes 5-7 days to link a checking account and you have to do the "verify small deposits" thing to get it going.

That should be it. If everything goes according to plan you should be able to send and receive money to/from friends.

Conclusion and Recommendations

It took a bit of back and forth with my pal SG to get this going the first time. But once it's set up I think this has the potential to be a fantastic way of settling up wine purchases between friends. No more floating money until the hand off occurs. No fees. Both buyers get points/miles/cashback on their credit cards. It's great.

Let's just hope Amazon doesn't shut this off. They're taking the hit on the credit card fee as it stands now, and if I had to guess why it would be to beef up their subscriber base to compete with PayPal.

Making friends in the area who have a similar interest in wine has been one of the best things about writing this blog the past few years. If you'd like to connect you can always drop me an email (wellesleywinepress@gmail.com) or reach me on Twitter: @RobertDwyer

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