By Christine Kern, contributing writer
Experts weigh in on the opportunities for Amazon Cash, mobile payments, and retail.
Amazon’s release of Amazon Cash will allow consumers to add physical cash to their Amazon accounts while at select brick-and-mortar locations, such as CVS Pharmacy, in lieu of using a debit/credit card. The move is designed to service the growing percentage of Americans who are unbanked or underbanked, as Innovative Retail Technologies reported, a market niche that some retailers are anxious to leverage.
"Un- and underbanked Americans are underserved by traditional financial institutions because many don’t have the identification or money to qualify to open accounts. Instead, they are increasingly serviced by alternative financial services companies and are often limited to products that are more restrictive and have higher fees. While some of these consumers will voluntarily remain outside the banking mainstream, many will ultimately decide – and qualify – to enter it,” explained Robyn Kaiserman, Senior Financial Services Analyst at Mintel.
But the success and future of Amazon cash is as of yet untested. Several experts have weighed in with their predictions regarding this new opportunity. Erin Jordan, account director and retail technology practice area lead at Walker Sands Communications, thinks Amazon may have a major opportunity with trusted consumers in the space.
Jordan asserted: “Amazon’s launch of a payment app throws their hat into the ring of many other notable brands working on breaking through in the payment space. And for good reason -- our 2016 Future of Retail study showed more than 1 in 3 consumers have used a mobile payment app in the past year-- and Millennials continue to drive these numbers up,” said Jordan. “Notably, the data also reveals the number one concern for mobile payment apps is security, a barrier that Amazon may be able to overcome since the marketplace is already trusted by the majority of consumers.”
While some experts postulate that Amazon Cash might draw younger shoppers who want to shop online but don’t have a bank card and don’t want to purchase Amazon gift cards, or those from whom online security poses a concern, not all experts see Amazon Cash as a great draw for everyone. Forrester Principal Analyst Brendan Miller told MarketWatch that Amazon Cash is destined to be too “onerous” for customers who already have credit or debit cards. Customers who have credit cards that offer rewards including cash-back will likely want to use those instead, he said.