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Amazon DevPay
Developer Guide (API Version 2007-12-01)

If a Customer Doesn't Pay the Monthly Bill

The preceding description of the monthly billing process (see The Monthly Billing Process) assumes that the customers pay their bills the first time we bill them on the first day of the month (on May 1 in the preceding example).

What if the customer's payment fails? The details depend on whether your value-add is greater than or equal to zero, or less than zero. The following table summarizes what happens, and the subsequent sections give examples.

In either case, we first ask the customer in an e-mail to update the payment method (e.g., the credit card). Then we try to collect from the customer three more times (on May 7, May 14, and May 21). In the table and examples that follow, we assume that the first retry attempt (on May 7) succeeds.

DateValue-Add Greater Than or Equal to Zero for That CustomerValue-Add Less than Zero for That Customer

May 1

We bill the customer and the payment fails

We bill the customer and the payment fails

Around May 2

We charge you:

  • AWS costs up to the amount of any April revenue collected to date (e.g., the April monthly fee collected on April 1)

  • 3% of any value-add collected up to that point

We charge you:

  • AWS costs up to the amount of any April revenue collected to date (e.g., the April monthly fee collected on April 1)

  • AWS costs not covered by the customer's bill (the amount of your (negative) value-add)

May 7

We:

  • Retry the payment and it succeeds

  • Subtract $0.30 and deposit the remainder in your DevPay account

We:

  • Retry the payment and it succeeds

  • Subtract $0.30 and deposit the remainder in your DevPay account

Around May 8

We charge you:

  • Any remaining AWS costs we've not collected from you

  • 3% of any value-add collected on May 7

We charge you:

  • Any remaining AWS costs we've not collected from you

If none of the retry attempts actually succeed, then effectively the actions in the final two rows of the table don't occur.

The following examples give specific details of how you get paid and pay AWS what you owe when your value-add is greater than or equal to zero, or less than zero.

Example When Your Value-Add Is Greater Than or Equal to Zero (Version 1)

If the customer doesn't pay after the first billing attempt, then we don't have any money to deposit into your account on May 1. However, if your product has a monthly fee, then we probably already collected the April monthly fee on April 1 and deposited it into your account (minus the $0.30 transaction fee). Around May 2, we calculate how much April revenue we've collected for you to date and your April value-add to date. We then charge you for the amount of any AWS costs you owe, up to the amount of April revenue we've already collected to date. We also charge you 3% of any value-add you have at that point.

For example, let's say the customer owes $21.00 total for the month of April (as shown in the following figure). The customer's payment for $11.00 on May 1 fails, but we've already collected $10.00 of the $21.00 on April 1 (the April monthly fee). Let's also say that your total AWS costs for that customer for April are $8.00.

On May 2, your value-add to date is $10.00 - $8.00 = $2.00. At that time, we charge you the full $8.00 in AWS costs (because they're entirely covered by the $10.00 April monthly fee the customer already paid). We also charge you 3% of your value-add to date, which is 3% * $2.00 = $0.06.

Positive value-add example (May 2)

We try again to collect the $11.00 from the customer on May 7, and the payment succeeds. We immediately subtract the $0.30 and deposit the remainder in your account. Around May 8, we again calculate how much April revenue we've collected for you to date and your April value-add to date. We then charge you for the amount of any AWS costs you still owe, up to the amount of April revenue we've just collected for you. We also charge you 3% of any new value-add you have at that point.

In this example, because you've already covered the AWS costs for April, the customer's payment is all value-add (as shown in the following figure). Therefore, at this time we only charge you 3% of your new value-add. Your new value-add is $21.00 - $10.00 = $11.00, so we collect 3% * $11.00 = $0.33.

Positive value-add example (May 8)

Example When Your Value-Add Is Greater Than or Equal to Zero (Version 2)

This example is the same as the preceding one, except that your total AWS costs for April are higher than the $10.00 April monthly fee—they are $15.00 instead of $8.00.

Around May 2, we calculate your value-add to date. It's currently $0.00 (because all the money we've collected to date will be used to cover AWS costs), so we don't charge you a 3% fee at that time. We do, however, charge you $10.00 in AWS costs (the amount covered by the $10.00 April monthly fee the customer already paid). You still owe $5.00 in AWS costs, but we won't collect that until after one of the retry attempts succeeds and your customer pays the remaining April revenue you're owed.

The following figure illustrates the example.

Positive value-add example with higher costs (May 2)

We try again to collect the $11.00 from the customer on May 7, and the payment succeeds. We immediately subtract the $0.30 and deposit the remainder in your account. Around May 8, we again calculate how much April revenue we've collected for you to date, your April value-add to date, and any remaining AWS costs you owe. We then charge you for the amount of any AWS costs you still owe, up to the amount of April revenue we've just collected for you. We also charge you 3% of any new value-add you have at that point.

Around May 8, you finally have a value-add that is greater than zero ($21.00 - $15.00 = $6.00, as shown in the following figure). In this case you can also think of it as the difference between the payment you just received and the remaining AWS costs you still owe ($11.00 - $5.00 = $6.00). At this time, we collect the remaining $5.00 in AWS costs you still owe, plus 3% of your value-add (3% * $6.00 = $0.18).

Positive value-add example with higher costs (May 8)

If instead the customer's $11.00 payment had failed at each retry attempt, you wouldn't get the remaining $6.00 of your value-add, and we wouldn't get the remaining $5.00 in AWS costs. We also wouldn't collect the $0.30 transaction fee or the 3% DevPay fee on that $6.00. Finally, we would cancel the customer's subscription to your product.


Example When Your Value-Add Is Less Than Zero

This example differs from the two preceding ones in that the amount the customer owes for April is less than the total AWS costs for April. The revenue is $17.00, whereas the AWS costs are $19.00. Your value-add is $17.00 - $19.00 = - $2.00.

Here, the customer owes $17.00 total for the month of April, and we've already collected $10.00 of it on April 1 (the April monthly fee). The customer's payment for $7.00 on May 1 fails. Around May 2, we calculate how much April revenue we've collected for you to date and charge you two amounts:

  • AWS costs up to the amount of revenue already collected (the amount of the April monthly fee)

  • AWS costs not covered by the total revenue for April (the absolute value of your negative value-add)

So we collect $10.00 in AWS costs (which is covered by the customer's April monthly fee payment of $10.00), and $2.00 for the AWS costs not covered by the total April revenue. The following figure illustrates the example.

Negative value-add example (May 3)

We try again to collect the $7.00 from the customer on May 7, and the payment succeeds. We immediately subtract the $0.30 and deposit the remainder in your account. Around May 8, we charge you for the amount of any AWS costs you still owe, up to the amount of April revenue we've just collected for you. Because your value-add is negative, we effectively charge you the amount of the customer's payment (as show in the following figure).

Negative value-add example (May 8)