To use the service, customers show their barcode to the store cashier, and tell them how much cash they want to apply to their Amazon account. Billed as Amazon Cash, shoppers in the U.S. can now go to local stores and charge up their account with cash money that they can then spend on Amazon.
PayPal's My Cash Card is a similar concept, although customers have to purchase the initial card at a brick-and-mortar retail partner before adding cash to it. Amazon's service could also be an alternative to prepaid card companies such as NetSpend and Green Dot, whose products can give unbanked consumers access to e-commerce.
Cash will be available at certain United States retailers at launch, including CVS, Speedway, and Sheetz. Customers can request a barcode from Amazon that is delivered via text message or print-at-home. With Amazon Cash, you can add money directly into your account, no bank accounts or cards necessary.
For a limited time, Amazon customers who add $50 or more to their Amazon balance using Amazon Cash can earn $10 digital credit towards select digital categories. In an attempt to reach those potential customers, Amazon has launched "Amazon Cash".
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"Amazon's service is open to anyone who has a mobile phone", said Richard Crone, a payments consultant, adding the system adds authentication via the phone credentials, the Amazon log in and the consumer showing his or her phone at the retailer.
Minimum transactions are $15 and the maximum is $500. Not all unbanked and underbanked customers are lower income, but 57.4% of unbanked customers cited not having enough money to keep in an account as a reason they did not have one, according to the FDIC.
Amazon isn't the first online service to find ways around banks. You no longer need to use a credit or debit card to shop on Amazon - but if you're really that concerned about having your banking information stolen, shopping with cash in an old-fashioned physical store might be the simpler solution.
How big of a difference maker the service will be remains to be seen, but considering the sheer size of the opportunity, Amazon would be remiss not to try.