Amazon has launched “Amazon Cash”, a new service for US customers to fund their Amazon accounts at physical retailers. It’s mainly a credit card workaround for the unbanked or underbanked, letting them shop online with the better-served public.
Amazon customers can receive a barcode to print or display on a mobile device with the Amazon app installed. They can then fund their accounts with cash at participating stores. For now, those stores are: CVS Pharmacy, Speedway, Kum & Go, D&W Fresh Market, Sheetz, Family Fare Supermarkets, and VG’s Grocery.
Users don’t need to carry any physical card to use the service, and Amazon isn’t charging any fees.
Amazon Targets Underbanked Americans
The company is trying to streamline online payments for the large percentage of people in society who don’t have access to credit cards.
The Federal Deposit Insurance Corporation (FDIC) reported that the number of unbanked Americans fell from 7.7% to 7% from 2013-15. However the number of individuals without credit cards is much higher — and includes everyone under 18. For Amazon and other online retailers, that’s a huge chunk of lost potential.
While gift cards are widely available, they come in preset values that may not be convenient to the target demographic. Amazon Cash allows users to add funds in any amount between $15 USD and $500. Customers can also buy standard gift cards to add to their Amazon Cash balance.
Since debit and credit cards are still the e-commerce standard in developed countries, many remain excluded. In recent years there has been a proliferation of pre-paid store cards to allow those who deal primarily in cash to shop online. However there aren’t many universal options, meaning consumers usually have to physically travel to a store and purchase a card with cash.
Still Need a Better Payments System Than Credit Cards
Credit/debit cards also come with privacy and security risks. By providing a retailer with a card number, users are essentially giving access to all that account’s available funds. Card fraud is widespread, particularly for US residents who are targeted for identity theft more than any other country.
Online shoppers also provide retailers with their full name, address and personal details. Shopping habits can be tracked on an individual level, and all purchases are recorded.
Card companies will cover the costs of fraudulent purchases, though this may only serve to convince thieves they’re not doing any real harm. And eventually, the costs of covering fraud are passed on to consumers via card fees and high interest rates.
Digital currency networks like Bitcoin work differently to debit and credit cards. Similar to cash, payments are “pushed” to merchants rather than “pulled” from customer accounts. There’s no need to provide personal details or any other private information (other than a delivery address if applicable).
Online payments are evolving slowly to include more people, but essentially it’s still an offline system adapted to suit digital conditions — and not always elegantly. The world is still waiting for an “internet of value” to make payments instantly and safely.
Will you use Amazon Cash, or do you know anyone who does? Is it convenient? Let us know.
Image via Wikimedia Commons