DISCUSSION
Can Amazon Cash open e-commerce up to millions of underbanked consumers?
Written by RetailWire Staff
Source: Amazon.com
Amazon.com has made it easy to purchase through any number of payment methods on its site. But pre-loading an Amazon account with cash hasn’t been an option — until now.
This week, the e-tailer announced the launch of Amazon Cash, which allows customers visiting participating brick and mortar stores to deposit between $15 and $500 in cash into an Amazon account by presenting an account-associated barcode (on a smartphone screen or print-out) to the cashier. CVS, Speedway and Family Fare are among the retailers already on-board.
According to a study last year, 17 million Americans went without a bank account and 51 million fell into the category of “underbanked” in 2016. Reasons for people eschewing bank accounts range from severe debt to fear of add-on fees to lack of steady employment. Beyond the implied social problems, there is the added concern that this segment of the population in unable to shop online, a disadvantage programs like Amazon Cash aim to address.
Amazon is not the first company to attempt to bridge the gap between cash and online shopping. Since 2012, Walmart has enabled customers to order online with their “Pay With Cash” option. Customers order from Walmart’s online store, then bring their order number into a Walmart location and pay with cash at the register, authorizing the order to ship.
PayPal My Cash, which is available at outlets including 7-11, CVS and Rite Aid according to the PayPal website, serves a similar function as Amazon Cash. Deposits through PayPal MyCash, however, require a $3.95 service fee, whereas Amazon Cash has no service charge attached.
In fact, Amazon’s creation of Amazon Cash could be seen as a direct challenge to PayPal. PayPal had reportedly been in talks with Amazon earlier this year about a potential relationship that would help the e-tailer reach the underbanked, according to a Barron’s Next article.