Amazon Debuts Cash-based Alternative Payment Method
Amazon Cash is the latest payment method and feature supported by Amazon and was designed for the under- and unbanked. Consumers can request a barcode that is linked to their Amazon account, and when checking-out at a partner retail store location the customer can add between $15 and $500, using cash, which will become stored credit on their Amazon account. Amazon Cash was announced on April 3rd and is now available in the United States.
Consumers with Amazon accounts can simply request a barcode to start using Amazon Cash. This barcode can be scanned directly on the consumer’s phone (sent via text message) or can be printed out and taken in-store. Amazon has partnered with CVS Pharmacy, Speedway gas stations and a handful of other gas stations and grocery stores to facilitate payments to an Amazon Cash account balance. The consumer provides their barcode and the amount of cash they wish to add to their Amazon account, and it is quickly available for use.
This new payment method immediately becomes a new option for U.S. Amazon customers. According to the FDIC, 7 percent of U.S. households were unbanked in 2015, while an additional 20 percent were considered underbanked. Amazon Cash provides a more direct way for these consumers, 27 percent of U.S. households, to make purchases with the online retailer.
This feature also appeals to Amazon users and consumers who may use the company’s alternative payment service. Although not as well-known as other e-wallets, Amazon offers an Amazon Pay service; allowing merchants to integrate this system and have consumers provide shipping and payment information by logging-in to their Amazon accounts. Amazon truly acts as an e-wallet in this scenario, processing the consumer’s payment without the merchant touching payment information, but otherwise not involved in the transaction between the consumer and merchant.
Amazon has a massive user base, but so far hasn’t been able to convert that into an alternative payment method used across merchants as successful as PayPal or Visa Checkout. However, providing the cash-based payment method that can then be used to pay at many retailers using Amazon may drive more merchant adoption of Amazon Pay, particularly among those that target the underbanked. Amazon Cash now offers a cash alternative payment option to better compete with PayPal and their My Cash Card, meaning this move may not just drive more sales with the underbanked, but also drive more use of Amazon Pay.
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