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Amazon (AMZN) Offers the Option to Shop without Bank Card
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Amazon.com, Inc. (AMZN - Free Report) fired another salvo at Wal-Mart (WMT - Free Report) and other brick-and-mortar retailers with a new service designed for customers who don’t have debit, credit or bank cards.
The e-commerce giant yesterday launched Amazon Cash, a service that enables customers to add cash to their Amazon.com accounts using a barcode generated from its website.
A user needs to generate a barcode from the Amazon Cash site or mobile app. The barcode can be accessed through a smartphone (arrives as a text message) or by taking a printout of it.
The barcode can be scanned at any participating retailer and the cashier adds an amount between $15 and $500 to the account in a single transaction. A confirmation of the transaction is sent to users through email, text or push notification who pay the exact amount in cash with no extra charges. The user can use this anytime on Amazon.com. The same barcode can be used in case the user wants to add more cash.
Participating retailers in the U.S. include CVS Pharmacy, Kum & Go, D&W Fresh Market, Family Fare Supermarkets, Speedway, Sheetz, and VG’s Grocery. The company plans to add other stores, going forward.
We note that the service is similar to PayPal’s My Cash Card, a barcode-only service that allows customers to add cash to their PayPal accounts.
Amazon’s shares appreciated 52.1% in the last one year compared with the Zacks Internet Commerce industry’s gain of 43.1%. We believe investors are encouraged by Amazon’s international expansion and grocery initiatives and its efforts around AWS. The company capitalizes largely on its execution strength, robust performance and technological prowess.
Trying to Tap Underbanked/ Unbanked Customers
With the launch, Amazon is practically trying to cater to underbanked and unbanked customers and those who are reluctant to use cards for online shopping fearing cyber theft. Per a 2015 report from FDIC, “cash customer” (the unbanked or “underbanked) comprised around 27% of U.S. consumers.
It seems that Amazon is trying to penetrate deeper into the U.S. e-commerce space. This makes sense as e-commerce in the U.S. has slowed down and Amazon is facing tough competition from Alibaba (BABA - Free Report) and eBay (EBAY - Free Report) . Traditional retailers are also a force to reckon with and a number of them are running e-commerce sites as well.
Amazon might add this benefit to international markets in the future. For now, it is simply trying to gain mindshare of U.S. customers
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Amazon (AMZN) Offers the Option to Shop without Bank Card
Amazon.com, Inc. (AMZN - Free Report) fired another salvo at Wal-Mart (WMT - Free Report) and other brick-and-mortar retailers with a new service designed for customers who don’t have debit, credit or bank cards.
The e-commerce giant yesterday launched Amazon Cash, a service that enables customers to add cash to their Amazon.com accounts using a barcode generated from its website.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
A Barcode Does the Needful
A user needs to generate a barcode from the Amazon Cash site or mobile app. The barcode can be accessed through a smartphone (arrives as a text message) or by taking a printout of it.
The barcode can be scanned at any participating retailer and the cashier adds an amount between $15 and $500 to the account in a single transaction. A confirmation of the transaction is sent to users through email, text or push notification who pay the exact amount in cash with no extra charges. The user can use this anytime on Amazon.com. The same barcode can be used in case the user wants to add more cash.
Participating retailers in the U.S. include CVS Pharmacy, Kum & Go, D&W Fresh Market, Family Fare Supermarkets, Speedway, Sheetz, and VG’s Grocery. The company plans to add other stores, going forward.
We note that the service is similar to PayPal’s My Cash Card, a barcode-only service that allows customers to add cash to their PayPal accounts.
Amazon’s shares appreciated 52.1% in the last one year compared with the Zacks Internet Commerce industry’s gain of 43.1%. We believe investors are encouraged by Amazon’s international expansion and grocery initiatives and its efforts around AWS. The company capitalizes largely on its execution strength, robust performance and technological prowess.
Trying to Tap Underbanked/ Unbanked Customers
With the launch, Amazon is practically trying to cater to underbanked and unbanked customers and those who are reluctant to use cards for online shopping fearing cyber theft. Per a 2015 report from FDIC, “cash customer” (the unbanked or “underbanked) comprised around 27% of U.S. consumers.
It seems that Amazon is trying to penetrate deeper into the U.S. e-commerce space. This makes sense as e-commerce in the U.S. has slowed down and Amazon is facing tough competition from Alibaba (BABA - Free Report) and eBay (EBAY - Free Report) . Traditional retailers are also a force to reckon with and a number of them are running e-commerce sites as well.
Amazon might add this benefit to international markets in the future. For now, it is simply trying to gain mindshare of U.S. customers
Currently, Amazon is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>