It looks like something has changed in Arq since the docs, as I don't see the 'create restricted user' option - just 'change credentials'. And they don't seem to list permissions required anywhere.
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Arq support (fast response!) say the 'Create Restricted IAM User' button is only in the Mac version, not the Windows version. But they also pointed to a doc page I didn't find with a sample policy here:-
https://www.arqbackup.com/documentation/pages/create_aws_key_pair.html
Basically the suggestion is to create a wildcard 'all S3 permissions' policy restricted to just the bucket you are using for backups.
Yes, the policy on that page is appropriate. It gives you access to the bucket, the bucket contents, and also to list the buckets in the account. I would create the policy, assign it to a group, then create an IAM user to put into that group. Make sure you use the credentials (access / secret key) of the IAM user not of the root user. The root user shouldn't have keys, and that account should never be used. Create yourself a separate admin account with MFA set up.
B2 is easier, and cheaper, but S3 is likely to be more reliable given that data is stored in three data centers and has S3 more features.
I've had Arq > B2 set up for a while now (ultimately to replace CrashPlan) - as you say, very easy to setup, and dead cheap.
The plan now is to add S3 (Glacier) as a secondary backup.
Suggestions:
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