Cheatsheet: What to know about Prime Reload, Amazon’s latest rewards program

Amazon introduced Prime Reload Tuesday, which rewards 2 percent of purchases back to Prime members who fund their Amazon balances with their debit cards.

The key updates:

  • To register for 2 percent rewards, users (they need to be Prime members already) provide their debit card number, U.S. bank account and routing numbers (Amazon will “sometimes route orders through your debit card instead of your bank account,” to complete the reload more quickly, it states on the website) and U.S. state driver’s license number.
  • Users top up their Gift Card Balance with their checking account or the debit card associated with the checking account. They get the 2 percent back into the Gift Card Balance at the same.
  • Purchases aren’t eligible for 2 percent rewards when shoppers reload using a credit card, even if it’s one of Amazon’s own branded credit cards.

The key numbers:

  • 66 million Amazon customers in 2016 were Prime members, compared to 46 million the year before.
  • 40 percent of Prime members spend more than $1,000 a year on Amazon (compared to just 8 percent of non-Prime shoppers).
  • Amazon offers two branded Visa Signature credit cards; one for Prime members that rewards 5 percent back and special financing options, one for non-Prime members that offers 3 percent back. Both were launched this January.
  • Prime subscription revenue was $5.7 billion in 2016, assuming 90 percent of Amazon’s “retail subscription services” revenue (which also includes audiobook, e-book, and digital video and music services). Under the same assumption, it generated $4 billion in Prime subscriptions in 2015.
  • 32 percent of shoppers that own a store branded credit card are Amazon cardholders; Amazon ranks number 1 among consumers with store cards, followed by Target (30 percent) and Macy’s (24 percent), as reported by the Vyze Retail Credit Survey.

The analysts’ view:
Cherian Abraham, senior business consultant, Experian: “Amazon primed this move — no pun intended — to take place once the Prime customer base reached sufficient scale to make this economical for Amazon to bring to its Prime base. Reloading an Amazon prepaid account via a bank debit allows Amazon to keep the cost low and one-time, whereas for the bank it disallows revenue that it would have realized for every Amazon transaction — and it loses visibility on to these transactions. And a prepaid load off of debit is a far less risky proposition compared to its own branded credit. Further this move allows it to go to a new segment of customers who are Prime customers but don’t own a an Amazon branded credit card.”

Brendan Miller, principal analyst, Forrester Research: “When you add money from an outside account into a gift card account, that is often treated very differently by the consumer than money sitting in their actual bank account. There’s an emotional difference about it. It tends to get spent more readily than when it’s sitting in your bank account and people are trying to manage budgets… It also reduces Amazon’s card processing fees. Instead of me making a bunch of transactions on my credit card, I’m making fewer transactions because it’s being reloaded, say, once or twice a month versus the seven, eight, nine separate purchases I make each month on Amazon. Then I’m only paying with my card twice to reload it so Amazon’s transaction fees will be lower. Debit is always cheaper to process than credit.”

The big picture:
Forget the rumors about Amazon potentially buying a bank. Amazon practically is a bank. To date it has a foot in payments, cash, small business lending, consumer credit and now it’s coming for debit card users.

It’s not necessarily positioning itself to replace the existing banks, Miller said, it’s just another way for people to interact with their money at a time when consumers funds are becoming more and more dispersed. Too bad for banks, that naturally means they’ll be taking fewer and fewer deposits and eventually, engage less and less with their customers, who will be engaging more with service providers like Amazon.

“There was already a trend of bank card spend being consolidated inside apps and services, and we are seeing the downstream risk to banks who are aware of this trend but aren’t do anything to act on it,” Abraham said.

4 fintech tools that still run on cash

fintech apps that use cash

Enough with the talk about moving to a cashless society. Sure, that works if you’re Sweden and some other wealthy Scandinavian countries, but for much of the world, the demand for cash seems to be growing, not shrinking. Actually, we’re in a bull market in ATMs. Millennials don’t seem to understand how credit cards work and many shun them altogether (in a recent study, 63% of this demographic doesn’t have a credit card).

Many people don’t qualify — or don’t want — traditional credit products. According to PayNearMe, a fintech firm that handles cash payments for its users, more than 28% of U.S. consumers prefer to use cash because they either don’t have a bank account or choose not to rely on automatic payments, checks and credit cards.

A more realistic evolution of how the move away from cash plays out probably doesn’t include bitcoin, either. So far, the cryptocurrency is relegated to hackers and drug pushers.

What does have legs are apps and services that bridge the digital and analog worlds of payments. These tools provide more digital alternatives for people who still prefer the ease of use and comfort in touching paper money and coin.


This app was designed for people who prefer to pay their bills in cash. PayNearMe users download an app and use it to scan their rent, utility and insurance bills. To pay, they bring their smart phones and cash into one of 17,000 retail locations around the U.S. like 7-11s and Family Dollar Stores. A cashier takes the cash, credits the app with the exchange, and the bills get paid.

The Glendale, California-based company has raised over $70 million and recently announced the acquisition of a personal finance management (PFM) app, Prism Money. With Prism, PayNearMe can handle more breadth of its users’ payment cycles.


For users who eschew banks, there’s some virtual banking technology tied to debit cards that looks and smells kind of like a bank, but doesn’t require an account. GreenDot sells debit cards that can be loaded with cash at local storefronts and those cards function just like bank-issued ones. Users can add, send, and manage their money tied to their cards.

GreenDot is publicly traded on the NYSE ($GDOT) and has a marketcap around $1 billion. The company did close to $700 million in revenue during 2015.


Ever travel overseas and come back with six pounds of British pounds? Yeah, me too. Turns out that’s a pretty common occurrence. TravelersBox is an ATM-like kiosk installed in various airports around the world that will take your spare foreign currency and move it onto PayPal or a Starbucks gift card, or give it to charity.

The company has raised $14.5 million in venture and seed money.

Western Union

WU has its own prepaid card called NetSpend and it functions similarly to GreenDot’s debit cards. Users can direct deposit their payroll and government benefits directly to their cards, as well as make money transfers off the card. Money transfers utilize Western Union’s transaction network in 200 countries. Users can use their cards to pay bills online and save for the future via access to a WU savings account.

Western Union provides its own branded cards but its branch locations are also available for people to load money on to other prepaid card brands.


[podcast] How to build a bank with no branches with’s Ben Katz is an alternative to bank branches

Wall Street has been shedding Main Street bank branches of late and it doesn’t appear like it’s letting up any time soon.'s Ben Katz’s Ben Katz

As more financial transactions occur over the web, the purpose of a bank branch is changing and for many banks, they just can’t make them profitable anymore. Upstarts smell an opportunity and they’re stepping in by creating branch-light banking alternatives.

Ben Katz, founder and CEO of, joins us on the Tradestreaming Podcast. His firm provides most basic banking functions without any physical branches.

When you talk to Ben, he likes to make a simple analogy that drives home how his firm and others are forming an alternative to a bank branch: Just as Netflix is to Blockbuster, is to Wells Fargo.

We spend the bulk of our conversation discussing how his debit card solution, tied to an affinity or brand his users love, can compete against the branch footprint of some of the largest U.S. banks.

Listen to the FULL episode

Here’s what we discuss in this episode of the Tradestreaming Podcast

  • How branded financial services resonate with customers differently that incubent offerings
  • How, by partnering with non-financial brands that people love, financial services can tap millions of potential customers on Facebook cost-effectively
  • Why banks struggle with the cost-structure required to service retail clients
  • How customer service is handled for financial services that function without physical branches
  • The evolution away from call-center focused service to self-service solutions that can actually provide better and more accurate service
  • Tying proactive telephone service to a user’s app in an effort to proactively identify a user’s service question before he or she begins dialing the 800 service number
  • Whether bank licensing makes any sense for financial services operating outside of lending

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