Amazon is tapping into a new market: those who are not yet shopping online. The new Amazon Cash service, announced Monday, allows users to spend cash instead of linking a debit or credit card to make purchases on Amazon. Similar to PayPal, the new feature appeals to those who get paid in cash, don’t have a bank account or debit card or don’t use credit cards. The new service is also designed for those who refrain from linking bank account or card numbers online for fear of being compromised.
According to a 2105 FDIC report, around 7 percent of consumers are unbanked or underbanked, meaning they are without a checking or a savings account.
The service works by giving users a special barcode that can be sent to a mobile device through text message, presented through the Amazon mobile app or printed out in hard-copy format. Users take the barcode to one of Amazon’s designated brick-and-mortar retail partners where a clerk scans the code and the desired amount of money, between $15 and $500 in a single transaction, is instantly added to the Amazon Store account through a cash or card payment to the retailer. The service is currently being offered at CVS Pharmacy, Speedway, VG’s Grocery, Sheetz, D&W Fresh Market, Family Fare Supermarkets and Kum & Go, with other stores to be added in the future.
Amazon Cash functions similarly to Amazon’s gift card feature; there are no fees associated with the service and funds become available immediately. The barcode can be reused and added to a user’s iOS Wallet app or as a shortcut on an Android’s homescreen.
Earlier last week, the online retail giant announced the launch of Amazon Connect, a customer contact service that allows any business to deliver lower-cost customer service through Amazon’s cloud technology. The service is based on the same contact center technology used by Amazon customer service associates around the world. Designed to be more cost-effective than traditional contact center solutions with inflexible licensing, Amazon Connect is designed to be scaled up or down in response to business cycles including promotions, new product launches or seasonal spikes. Customers pay by the minute for Amazon Connect usage plus any associated telephone services.
Following the announcement of both new services, Amazon stock hit its 10th all-time high of the year on Tuesday, and traders predict the retail giant’s shares will rally to even more record levels over the coming weeks.