Amazon Sees DDAs As Ticket To Teen Spending On Amazon

Amazon, setting its sights on Gen Z and millennials, is in initial talks with numerous banks, including JPMorgan Chase and Capital One, to create a product that can enable these credit card-averse shoppers to purchase things on its eCommerce site.

Bloomberg reported Amazon is in conversation with banks about creating a payment product similar to a checking account but wants to tailor the product to appeal to those who don’t have a credit card. The newswire noted consumers aged 18 to 24 prefer using debit cards over any other payment method.

“The sooner you can start collecting information on them, the better prepared you are,” said Tim Barefield, a managing director at the consulting firm Kotter International. “For Amazon, it’s another way to expand their brand. Their brand is reaching out every place that their tentacles can reach out to.”

The push on the part of the eCommerce giant underscores its savviness when it comes to online shoppers. Amazon recognizes that digital accounts, particularly for minors, could create lifelong customers. The company already targets other stages of life, noted Bloomberg, pointing as an example to the discounts it offers parents for diapers and baby food. College students, meanwhile, get a price cut on Amazon Prime memberships.

Amazon acknowledges its Amazon Cash service, which enables teenagers to fund their Amazon wallet to use online by dropping off money at drugstores and convenience stores, isn’t perfect. Consequently, the company is looking for new ways to make it easier for those without credit cards to shop online.

Eric Marks, a senior director at financial consultancy West Monroe Partners told Bloomberg that if Amazon is able to create a better banking experience for younger shoppers who are very digitally savvy and are well-accustomed to getting what they want in a few clicks, it could result in long-term banking customers for Amazon.  What’s more, he said, Amazon could lure teens through Alexa, its voice-activated digital assistant. Devices like the Amazon Echo, which has Alexa built in, are popular among teenagers.