With Amazon Cash, the e-commerce giant took steps to improve their position in the burgeoning pre-paid credit card market.
Presented as “The fast, no fee way to use cash to shop on Amazon,” shoppers can add between $15 and $500 in cash to their Amazon Balance at more than 10,000 retail stores nationwide.
While Amazon isn’t first with this option — PayPal and Walmart have offered this for a while — the move clears a path toward picking up potential unbanked customers.
And that number is substantial, the Federal Deposit Insurance Association (FDIC) estimated in 2015 that 27% were unbanked or underbanked and use cash only. A more recent Gallup poll suggested that number was in decline, but that still leaves 61 million Americans who choose to pay with cash.
The FDIC said most unbanked Americans use cash only because of financial circumstances, a third choose said they opt out of using a bank because they don’t trust the banking system, and almost a third blamed high or unpredictable fees.
By creating an option for the unbanked population, Amazon can theoretically grab even more of the e-commerce market share. Already the leading e-retailer in the world, according to recent industry figures, Amazon netted $136 billion in sales in 2016.
Before Amazon launched Amazon Cash, cash only users had to buy a gift card and transfer those funds to their Amazon balance. With this new program, cash users receive a barcode either through a text message or to print at home, as well as through Amazon’s mobile app. When they want to add to their Amazon balance, they can bring their mobile device or even a printed image of the bar code to a participating merchant to add money.
E-commerce is a rapidly growing market with Amazon leading the way in direct sale products and third-party sales programs.
But as Amazon grows, so does the rest of the industry, and there’s a huge opportunity for businesses to capitalize on the e-commerce and mobile commerce market — without losing money to third-party program fees.
Contact National Merchants Association to find out how we can help your business become more profitable by safely entering the e-commerce marketplace on your own.
Click here or call 866- 509-7199 to talk to an experienced NMA representative.