Payments

Amazon Cash opens up underserved market

  • Amazon just launched Amazon Cash, a way for customers to go to retailers and top up their Amazon accounts with cash at the retailers' point of sale.
  • The move is a means to grow Amazon's reach among the underbanked and a nod to the continued resilience of cash, analysts say.
close

Email a Friend

Over 20 million Americans who don’t have bank accounts can now shop on Amazon using cold, hard cash.

Under the company’s newly launched Amazon Cash program, the customer presents an Amazon barcode to the retailer, and they can load up to $500 in a single transaction with no fees. The money can then be used to shop on Amazon.com. Right now, customers can load cash at retailers like CVS, Speedway, Kum & Go, D&W Fresh Market, Sheetz, Family Fare Supermarkets and VG’s Grocery.

Buying a gift card was the only way a cash customer could load money onto an Amazon account previously. Amazon hopes this will help the company penetrate deeper into the underserved market by offering this fee-free incentive to transfer cash to an Amazon account.

“Amazon is realizing that to grow, they’re going to have to reach out to new demographics and new targets such as the underbanked that can now take advantage of the benefits of e-commerce,” said, Brendan Miller, principal analyst at Forrester Research. The move can also be seen as a nod to cash’s continued resilience.

“While the growth of digital commerce is relentless, cash is not going away and remains important for many customers,” said Zilvinas Bareisis, senior analyst at Celent.

Amazon Cash is similar to PayPal’s My Cash, which allows customers to top up their accounts with cash. Bank offerings for the same consumer market, such as Chase Liquid and the Citi Access Account, aren’t entirely fee-free, with a $4.95 monthly fee for the Chase Liquid card and qualifying deposit requirements to avoid a $10 monthly fee for the Citi Access Account.

As the underserved market gets more competitive, it’s a space banks can draw some lessons from, said Miller. “Amazon’s motivation is to make the transaction simpler, easier and faster,” he said. “Anytime banks come out with one of these things, they never make it easy on the consumer.”

But Miller speculates that more could be at play here. By letting Amazon’s bar code interact with retailers’ checkout systems, that may open up future possibilities to use Amazon accounts to pay for cooperating retailers’ products.

“They’re getting integration [with point of sale systems] to load cash, but why not just flip the switch and make it available to burn cash as well?”

0 comments on “Amazon Cash opens up underserved market”

Payments

Square’s Cash App continues to scale the bitcoin hype wall

  • Bitcoin prices are up over 100% year to date.
  • Square's Cash App is riding those prices higher as it sees record bitcoin revenues.
Zoe Murphy | November 10, 2020
Member Exclusive, Payments

PayPal’s new plans focus on owning more of the ecommerce transaction

  • PayPal has massively grown its payment volume, but not its engagement metrics.
  • PayPal's recent earnings call show a company with expansive plans for its digital wallet.
Zoe Murphy | November 04, 2020
Payments

‘The nice thing about our model is everyone wins’: Plastiq allows consumers to use credit cards at businesses that don’t accept them

  • Digital payments are good options for everyday-type transactions.
  • Many merchants still don't accept credit cards because they don't need to.
Michael Deleon | October 26, 2020
Payments

Inside the Techstars and Western Union Accelerator

  • As a 170 year old company, Western Union looks outside for innovation in addition to its own product development.
  • The company recently named its 2020 class of fintech startups to the Techstars and Western Union Accelerator.
Zoe Murphy | October 22, 2020
Payments

PPRO’s Steve Villegas on how COVID is impacting local payment behavior

  • PPRO has a lot of experience working with local and cross border payment options.
  • The firm's vp of payment partnerships in North America joins us on the podcast to talk payments.
Zachary Miller | October 13, 2020
More Articles