Industry Trend Analysis - Rechargeable Just One Weapon In Amazon's Payments Arsenal - APR 2018
BMI View: Amazon Rechargeable will be just one of several powerful online payments tools the e-commerce giant will use to encourage more consumers to use its online shopping service. Integrated payments are key to attracting and retaining customers and the debit card-style Rechargeable will cater to those low-income consumers unable or unwilling to completely forego using cash. The product is likely to appeal in Latin America and Asia but will not by itself be enough to disrupt the wider digital payments market.
Reportedly, Amazon will soon launch its Rechargeable-branded debit card in Mexico. The company aims to appeal to consumers who do not own a credit or debit card and who have a low engagement rate with online shopping platforms due to e-commerce providers' reluctance to embrace cash-on-delivery payments (which bear considerable operational and security costs). The card is backed by Mastercard as well as Grupo Financiero Banorte; their strong reputations should allay concerns consumers might have about security and quality of service. Users can put cash on the card in convenience stores located across Mexico; ease of use and practicality will lower barriers to adoption.
Since October 2017, Amazon has been offering a cash payments service in Mexico, allowing consumers to deposit small amounts of cash with leading convenience stores such as 7-Eleven to serve as payment accounts. That mirrors a similar service offered by Latin America's main e-commerce player, Mercado Libre, Amazon's biggest rival in the region. The new Amazon Rechargeable card refines that concept and offers better trust and security, key to deepening customer relationships in a market where credit cards are widely available but not often used for online shopping.
|Cash Will Be Hard To Displace For Some Consumers|
|Mexico - Preferred Payments For Online Shopping|
|Source: ehopworld, Statista|