- Amazon is trying to break down barriers that keep those without credit cards or bank accounts from shopping on the site.
- The retailer is aggressively going after these customers with new initiatives like Amazon Cash, Prime discounts, and, reportedly, some kind of checking account.
- The unbanked tend to be lower-income, and they often shop at stores like Walmart.
Amazon is going after low-income shoppers in a big way.
Amazon has already worked to appeal to these customers with initiatives like Amazon Cash, which allows people to load money into their Amazon account through a convenience store. Amazon has recently expanded the program to include Coinstar machines, which customers can use to deposit money directly into their account.
There are no fees associated with the services, which will roll out to 5,000 Coinstar machines with paper bill acceptors on them.
Amazon likely wants to make it easier for customers who don’t have debit or credit cards to shop on the site. Amazon already makes a play for those customers by offering discounted Prime memberships to those with EBT or Medicaid cards. The company is also testing a pilot program with the USDA to offer SNAP benefits to online shoppers.
Amazon is reportedly working on a program that would take the initiative one step further and produce a product similar to a checking account, according to the Wall Street Journal. Customers could reportedly hold money in the account and take deposits, but it wouldn’t compete with a traditional bank.
Most of these potential customers are either younger or have a lower income than Amazon’s traditionally well-heeled Prime members. But they spend money, too, and as Amazon dives more heavily into its fresh grocery and essentials business, the convenience may drive them to the website.
There’s still a large part of the US population that is unbanked – that means no checking account, savings account, or credit cards of any kind.
That leaves this population – an estimated 15.6 million people– without any way to shop online via traditional means. It makes sense for Amazon to launch a program directly aimed at this population, while also reducing fees it pays to banks along the way.
This customer segment has long been Walmart’s forte, and they have their own products geared toward this customer, like low-fee checking accounts and money services that are done in the store, like low-fee check cashing and bill pay.
In 2016, Walmart generated $13 billion in sales from customers using SNAP benefits, otherwise known as food stamps.