Fintech, or the integration of technology applications into financial services, is a rapidly growing field. Online retailers like Amazon are adopting fintech services like Buy Now Pay Later to attract customers and increase sales, pitting them against banks offering similar services.
While not strictly a fintech company, Amazon has been quietly growing its fintech capabilities with service offerings like Amazon Pay, Buy Now Pay Later, Amazon Cash, Amazon Lending, and more. These new fintech products make it easier for the online retailer to attract and keep valuable customers.
Keep reading to explore some of Amazon’s fintech services in more detail and learn how they impact the overall user experience.
Amazon Pay allows consumers to pay for goods or services on other websites using their Amazon account.
In order to use Amazon Pay, customers must have an existing Amazon account or sign up for one. This allows users to upload their bank or card information to Amazon’s secure payment system and then pay using this method on other sides, instead of entering bank or card information with another online retailer.
Amazon then securely sends the payment data to the third party, allowing it to remain encrypted between sender and recipient. The third party is able to process the payment without decrypting the data, helping users to keep their financial information safer online.
There are also no additional fees when you use Amazon Pay.
Amazon Cash allows customers to add money to their Amazon account without a credit card to spend at more than 120,000 participating retail stores.
To use Amazon Cash, customers must visit a participating store in person, show the cashier their phone with the Amazon Cash application open and a special barcode displayed, and the cashier will deposit money directly into the customer’s Amazon account.
The money is available immediately and can be used to make purchases on Amazon.com.
Currently, Amazon Cash is only available in the United States and can only be used with a US-based Amazon account.
Participating stores include CVS, Sheetz, Speedway, D&W Fresh Market, and many more.
Amazon Lending is a small private financing program through Amazon Capital Services that offers eligible U.S. businesses with funding solutions that don’t require extensive paperwork.
The program provides hundreds of millions of dollars in financing to support working capital needs for high-quality businesses selling on Amazon.com and gives eligible companies with quick access to capital to help them grow, invest, or diversify their business.
Amazon Lending is best suited for small to mid-size businesses who would otherwise qualify for traditional financing from a bank but don’t want to deal with the extra forms or have yet another vendor to manage.
The minimum loan amount sellers can apply for is $1,000 and the maximum loan amount is capped at $750,000. Sellers can choose between 3-, 6-, 9-, or 12-month term loans and enjoy fixed monthly payments.
Amazon Buy Now Pay Later
Amazon’s “Buy Now, Pay Later” service allows customers to purchase items now and pay for them over time, interest-free.
Usually, the first payment is 20% of the total value of the purchase, and the remaining balance is divided over the next 4 months.
It’s important to note that some items like digital content, grocery and prescriptions, or collectibles are not eligible for BNPL, and shoppers must spend at least $50 per order.
Amazon Go is a digital grocery store that uses technology to eliminate checkout lines and customer interactions with staff. Customers simply scan their phones at the entrance of the store, and then they can shop as they normally do.
Once they’re done shopping, they just walk out of the store and their purchases will be charged to their Amazon account automatically. Currently, there are only a few Amazon Go stores in the United States and the UK, but the company plans to expand this concept globally.
Amazon Reload is a service that allows customers to add money to their Amazon balance using a credit or debit card. You can also add funds using a pre-paid card. This can be used for making purchases on Amazon, or for paying for AWS services.
Reloading $100 or more to your account in one transaction also qualifies you for a $10 bonus credited to your account. Currently, reloads can be done either online or at select physical locations such as CVS Pharmacy or 7-11 stores.
Amazon Protect is an insurance program offered by Amazon UK that covers certain types of damage to eligible electronic products purchased on the site.
The program covers accidental damage, breakdowns, theft and loss, spills, physical damage, and manufacturer defects.
In the U.S., consumers can purchase individual insurance plans for devices through ASURION.
Amazon Store Card
The Amazon Store Card, also called the Amazon Prime Store Card, is a credit card offered by Synchrony Bank and is currently only available to Prime members.
There is no annual fee, 5% cash back on purchases, and 0% APR financing for 6, 12, or 24 months, making it one of the most attractive store credit cards on the market.
Card holders also get a $60 Amazon Gift Card upon approval of their application.
Amazon Payment Services & Fintech Lab (Middle East)
Since 2013, Amazon’s Payment Services branch has garnered worldwide attention in the eCommerce sector.
Since then, Amazon has expanded the quality, quantity, and variety of the financial services offered to their customers, solidifying the conglomerate’s place as the largest global online retailer.
Now, Amazon focuses on bringing effective, advanced payment and financial technology solutions to consumers and organizations of all sizes.
As embedded finance becomes more commonplace, Amazon is leading the way with its convenient, UX-oriented fintech options designed for consumer ease of use.
The Future of Amazon’s Fintech
While Amazon has not yet made any significant moves into the banking industry, there is potential for the company to do so in the future. In fact, some experts believe that Amazon could become a major disruptor to banks and credit unions, much like it has done in other industries.
There are several reasons why Amazon poses such a formidable threat to financial institutions across the globe. First, Amazon has a large customer base and extensive data on their spending habits. This information can be used to create personalized ads for Amazon’s financial products and services.
Additionally, the online retailer has a strong brand and reputation for customer service, which may make customers more likely to trust them with their finances. Finally, Amazon has deep pockets and could easily invest in the technology and infrastructure needed to provide robust banking and financial services.
Amazon’s Fintech Growth Will Continue
It’s clear that Amazon is a major player in the world of fintech. With a range of financial products and services already available and more likely to be developed in the future, Amazon is well positioned to change the way we manage our finances.
Of course, only time will tell how successful Amazon will be in this domain. But given their track record of innovation and customer focus, it’s safe to say that they are one to watch as the fintech industry expands over time.