Yesterday I enabled pay-what-you-want payments for ZeroBrane Studio (an open source Lua IDE) and went to bed. Today I found several payment confirmations (thank you to all who paid!) in my inbox and an email from Amazon (I'm using Amazon Simple Pay) saying that they disabled my account as they "do not support 'Pay what you want' business models" and "support business models selling services or products for a fixed dollar amount". I find this surprising as, while I couldn't find a definitive statement on this in Amazon's Use Policy, there are several popular sites that clearly follow "pay what you want" model and happily accept Amazon Payments (Humble Bundle and Indie Game Stand come to mind; Kickstarter can also be classified as using "pay what you want").
Amazon requires me to "remove the information related to 'donations' from your website", which I don't have anywhere on the support page or the project site. In fact, the site only accepts seven amounts and doesn't allow to enter an arbitrary amount, which (I thought) better matches "selling services or products for a fixed dollar amount".
Note that this is a business account registered for an LLC and not a personal account. I also find it puzzling, how selling a book I own for any amount I want through Amazon is different from selling a software product for any amount people want to pay. Here is Amazon's full email:
Greetings from Amazon Payments.
Thank you for registering with Amazon Payments. We appreciate your interest in our product.
Unfortunately, at this time, we are not able to approve your request for an Amazon Payments Business Account based on our review of your intended use of our payments service.
As stated in our Acceptable Use Policy the following product or services are prohibited from using Amazon Payments:
- Donations and Charitable Solicitations - includes charities and non-profit organizations without a valid 501©(3) tax exempt status, charitable solicitations, commercial fundraisers (including commercial co-venturers), or any activity associated with the solicitation of donations.
Unfortunately, we do not support "Pay what you want" business models. If you would like to continue transacting with Amazon Payments, please remove the information related to "donations" from your website. We support business models selling services or products for a fixed dollar amount. Therefore, we request you to make these changes to the website communication and reply to us afterwards. We will consider the reinstatement of your account post review of your website.
Please let us know if you have any further questions or concerns.
We have temporarily (sic) activated your account. Once your total balance is available for withdrawal, please initiate a new transaction to withdraw funds into your bank account.
Thank you for using Amazon Payments!
I responded to Amazon's message and am waiting for an answer.
[Update 10/23/2012] Here is the answer I received from Amazon (thanks to Amazon for responding promptly):
Greetings from Amazon Payments.
Thank you for contacting us regarding your account restrictions.
I would like to respond to your question regarding the difference between the business model you use and the one of Humble Bundle's.
Your site offers a product for download. I tried downloading your product without making any payment and I succeeded. This is the first difference between the two business models: your product is offered for free and also for a "pay what you want" price. In essence, whatever you receive when your customers pay is a "donation" because you offer the same product for free as well. There are no "free" products on www.humblebundle.com.
The second difference: Humble Bundle offers products of a specific dollar value for a "pay what you want" price. Although customers can pay more than the real value of the product, in reality they don't. Basically, Humble Bundle offers its customers a product with a determined dollar value for a discounted price. Your product doesn't have any set price. There is no way to know if by paying $100, for example, I overpaid the real value of your product or not. To be able to offer products for a discount price, you first need to identify how much your product is really worth.
Your account is currently restricted for incoming transactions but you can withdraw your balance into your bank account.
I hope it helps.
The answer makes sense, but does this mean that none of the open-source products can be paid for using Amazon Payments because they are available for free as well? How about sites using Amazon Payments that offer trial downloads for free? In my opinion it will come down to the definition of "donation" and whether a payment for a product can be classified as a "donation" when the product it also available for free (I fundamentally disagree with this).
Waiting for further clarification from Amazon...
[Update 10/29/2012] Here is what I sent to Amazon in one of the follow-ups, to which I have received no response:
I reviewed various definitions of donations and they agree on it being defined as a gift without any return consideration. For example,
A donation is a gift given by physical or legal persons, typically for charitable purposes and/or to benefit a cause. Donations are given without return consideration. (http://en.wikipedia.org/wiki/Donation)
Donation is the act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another person, without any consideration; a gift.
None of it is the case for transactions on my site; people come there to pay for software they use on a daily basis (even though they can choose how much to pay, which is not against your Acceptable Use Policy).
It's been more than 6 days since the last email, so I probably shouldn't expect any answer from Amazon. I switched to using Google Wallet, but it's unfortunate, as I was really looking to using Amazon Payments as my payment provider.