Amazon is introducing a new service that will enable customers to add cash to their Amazon accounts.
To use the service, customers request a barcode from Amazon, which is then accessed through its website, mobile app, or sent through a text message or printed.
They then present the barcode at a participating retailer — which includes CVS, Sheetz, and Speedway — to add cash amounts between $15 and $500.
Amazon Cash will make it easier for people without debit or credit cards to make purchases on Amazon. To make cash purchases previously, customers would have to purchase a prepaid card —which adds on fees — or buy an Amazon Gift Card and apply it to their account. With Amazon Cash, customers' accounts are immediately updated as soon as the barcode is scanned, and no fees are incurred.
Amazon Cash will be a key component to its success in emerging economies. For example, Amazon recently launched its Prime services in Mexico, where only 44% of adults have a bank account. It will be key for Amazon to address these consumers as it targets expansion in countries with similarly high unbanked populations, such as India, which has more than 165 million unbanked citizens, or other markets in Southeast Asia.
Retailers like Starbucks and Dunkin' Donuts are winning over consumers with their mobile wallets — apps developed by stores to make it easier for their customers to pay, and to deliver valuable perks.
And these retailer wallets are leading the overall mobile wallets industry, thanks to their ability to rapidly push out innovative features like rewards programs, coupons, mobile order-ahead, and custom marketing.
This may be surprising considering that retailer mobile wallets can be used only at a specific retailer’s locations; in contrast, popular universal mobile wallets like Apple Pay and Samsung Pay can be used at multiple retailers, as long as users are using the necessary smartphones.
Ayoub Aouad, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on retailer mobile wallets that assesses what makes them so successful and which retailers can most effectively leverage the technology to push sales, traffic, and average ticket size. The report also outlines what makes these mobile wallets attractive, and discusses some of the advancements being made in the payments industry that will affect mobile wallets' growth rate.
Here are some key takeaways from the report:
- Retailers with large addressable user bases who are loyal, repeat visitors, will see their mobile wallets continue to be popular with consumers, especially as there continues to be slow merchant adoption of near-field communication (NFC) technology as well as weak offerings by universal mobile wallets like Apple Pay and Samsung Pay.
- Loyalty programs will be a significant driver in retailer mobile wallet adoption. Companies like Starbucks and Dunkin' Donuts have been able to leverage their loyalty programs to acquire mobile wallet users, which, in turn, has driven store traffic and conversion rates.
- By leveraging these programs, sales are expected to grow at a five-year compound annual growth rate of 68%.
- However, adoption will begin to decelerate as a result of increased competition by 2020. As universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, adoption for retailer-based mobile wallets is likely to slow down because these offerings are their main marketing points.
In full, the report:
- Explains what hurdles universal mobile wallets have faced.
- Details what features retailers have adopted into their mobile wallets that have been successful
- Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
- Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.
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