TechCrunch and other news outlets reported yesterday about a new payment option now offered by Amazon for Amazon Prime customers. The Amazon Prime Reload product is a reloadable gift card that purchasers can fund through their debit card or their checking account and receive 2% cash back. The funds must be received in the gift card through the Prime member’s checking account or debit card in order to receive the cash back benefit.
Amazon today is launching a new perk for Prime members that will give them cash back on purchases – even if they’re not paying for items using an Amazon cashback credit card. Through a new rewards program called Amazon Prime Reload, Prime members can receive 2 percent back on purchases when they first load funds into their Amazon Balance using a debit card attached to their bank’s checking account.
As the FAQ’s outline, customers are asked to provide both debit card details and checking account details. How the purchase transaction is routed, either directly to the checking account through ACH or through a debit card network is up to Amazon, not the consumer, similar to the situation in a physical store where a consumer can use their debit card but does not control the network routing. Presumably, Amazon is making decisions in the background about cost and risk when determining which payment rails to take. A purchase transaction from the gift card is then internal to the gift card system, making that a very economical transaction for Amazon and will create the savings to fund the cash back reward.
Here are the FAQ’s regarding funding from Amazon’s site:
Frequently Asked Questions:
Q: Why do I need to provide my checking account and my debit card?
A: To fulfill your reload faster, we will sometimes route orders through your debit card instead of your bank account.
Q: I have more than one debit card, which one should I choose?
A: When possible, you should provide the debit card and checking account number which draws funds from the same account
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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