Tuesday , December 10, 2019

Amazon Brings Its PayCode Service to The U.S. To Facilitate Cash Payments

Leading online retailer Amazon.com Inc. is bringing its Amazon PayCode service to the United States in a deal with The Western Union Co. that gives consumers the option to pay for Amazon purchases in cash.

Seattle-based Amazon announced Wednesday that PayCode, which is already live in 19 countries, will be rolling out in the coming weeks for use at 15,000 Western Union agent locations in the U.S. At checkout, Amazon online customers select the “Amazon PayCode” payment option to receive an Amazon PayCode—a QR code and a number sent to their smart phone. Customers then have 24 hours to take the code to a Western Union agent to pay for the purchase in cash. There is no fee for using the service.

Items ship once the Western Union agent puts the payment through. In the event of a return, customers will receive a cash refund at a participating Western Union location when the return is received.

Amazon generated controversy earlier this year as it grew its base of cashier-less Amazon Go stores, with critics saying the stores ignore consumers who can’t or don’t want to pay with smart phones or cards. Amazon has since begun accepting cash in the stores. An Amazon spokesperson declined comment, but a company news release quotes a Federal Reserve Bank of San Francisco study that found 77% of payments in the U.S. were made in-person, and cash accounted for 39% of that volume.

“Customers have told us they love the convenience of paying in cash,” Ben Volk director of payments at Amazon, said in the release. “Together with Western Union, we’re able to offer customers more shopping choices, enabling them to pay for their online purchases in a way that is convenient for them.”

Thad Peterson, an e-commerce researcher and senior analyst at Boston-based Aite Group LLC, tells Digital Transactions News by email that “since this product has been available offshore for a while without being offered in the U.S., part of the reason for a U.S. rollout could have been to address any issues regarding cashless options like Amazon Go. However, I really think the motivation is to continue to expand customer paths to purchase, regardless of their economic situation or their relationship—or lack thereof—with a bank. Amazon is all about selling stuff, and this helps another demographic group buy what they have to sell.” 

Separately, Amazon reported its Amazon Cash account-loading service now has 100,000 U.S. locations. The service enables consumers to add cash to their Amazon accounts at participating locations. The company declined to disclose how many Amazon Cash locations it had a year ago, but recent additions include Western Union and Rite Aid drug stores.

The PayCode service could bring new foot traffic to Western Union, which is struggling against nimble online rivals in the increasingly competitive wire-transfer industry. “As one of the world’s largest digital and physical money movers, we’re innovating our service to give customers more access and choice,” Khalid Fellahi president of consumer money transfer at Denver-based Western Union, said in the release. “We’re embracing the complexity of a world where cash and digital payments are likely to coexist far into the future. We are providing easy solutions for customers who want access to the convenience of online shopping but prefer to pay in-person.”

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