For approximately 51 million Americans, access to conventional banking services is challenging or even nonexistent. These “underbanked” consumers often lack any sort of saving account, whether because their employment is unsteady, they distrust banking systems, or for various other reasons. But paying for everything in cash means that these consumers also are hindered from shopping online, a situation that online retailers hate to see. Accordingly, Amazon has initiated a new Amazon Cash program, which allows consumers to visit a local CVS or Speedway store, make a cash deposit, and thus open a linked Amazon account, equal to the amount of the deposit. In turn, they can enjoy the convenience and competitive prices of Amazon, without needing to rely on conventional forms of credit. Furthermore, Amazon will not charge for this service, which sets it apart from some previous attempts to access underbanked consumers. For example, PayPal My Cash similarly allows people to deposit cash through convenient locations such as 7-11 stores, but it charges a $3.95 fee for each transaction. By adding preloaded cash to its payment methods, Amazon can not only benefit an underserved segment of consumers but also potentially transform them into loyal customers.

 

Source: Matthew Stern, Retail Wire, April 6, 2017