Amazon has added the ability for UK users to pay for products and services on its ecommerce platform using cash. The service, called Amazon Top Up, lets shoppers load between £5 and £250 into their Amazon UK account in a single top-up transaction.
There are no fees to use the service, and funds are available to spend on Amazon.co.uk immediately after loading in -- restricted to spending on eligible products (though Amazon says this is in the "millions"). The service cannot be used to purchase Amazon Gift Cards.
To use Amazon Top Up, users must first obtain a barcode linked to their account, via the Amazon website or mobile app -- this can either be sent to their mobile or printed on paper -- and then take it, along with however much cash they want to add to their balance, to (currently) one of thousands of existing PayPoint points in convenience shops, grocery stores and petrol stations across the UK to have the cashier scan the code and add the cash to their balance. (Amazon says more UK retailers are "coming soon".)
In reality users of Amazon Top Up are purchasing an Amazon Gift Card that's automatically added to their UK account Gift Card Balance. The balance expires 10 years after the cash being loaded in if it's not spent.
Cash loaded into Amazon this way cannot be withdrawn, either, so it's most definitely not a bank -- rather it's a one-way chute for the unbanked or underbanked to maintain a spending balance on Amazon's platform.
The ecommerce giant debuted a similar service, called Amazon Cash, in the U.S. back in April. According to recent figures, some 64 per cent of households in the US subscribe to Amazon's Prime membership service. So adding a cash payment option is the company's way of seeking additional growth in the market by reaching households that aren't in a position to access its premium membership service.
Prime's penetration in the UK is lower vs the US -- one analysis from April suggested the company has around 8 million Prime subscribers, or a third of UK households, so there would still seem to be room for more growth at the top end for Amazon.
At the same time recent figures suggest the number of unbanked in the UK is around 1.5M. While the number of underbanked -- i.e. those who are unable to access financial services such as a credit card for example -- would be considerably higher, running to multiple millions.