EBT and Prime Membership for Lower-Income Consumers Expands Amazon’s Competition with Walmart and Other Retailers

Press Release
Nov 3, 2019

Rockville (MD), November 3, 2019 — Two years ago Amazon began offering discounted Prime membership to anyone with a valid Electronic Benefits Transfer (EBT) card, charging a monthly fee of $5.99 (instead of $10.99), and eschewing an annual fee altogether, making it easier for lower-income consumers to enjoy membership benefits.

EBT cards are government-issued cards used in place of checks to disburse government assistance funds to low-income adults. As detailed in the recent report Amazon Strategies: Financial and Payment Services, 2nd Edition, Packaged Facts estimates that more than $65 billion of these benefits were disbursed onto EBT cards in 2017.  

The shift is a very important one because it widens the scope of Amazon use well beyond its urban affluent core and allows it to compete against the likes of Walmart, which draws a higher share of lower-income consumers. Indeed, the Wall Street Journal estimated that in 2016, Walmart generated about $13 billion in sales from shoppers using the Supplemental Nutrition Assistance Program, or SNAP.

Along with several other retailers, including Walmart, Amazon is part of a U.S. Department of Agriculture SNAP Online Purchasing Pilot. In April 2019, New York became the first state to pilot the program. Amazon, ShopRite, and Walmart are currently able to accept SNAP EBT payments through their websites from New York residents.

Packaged Facts notes that because purchases on these cards are grocery-related, the program has the potential to drive use of Amazon Fresh among this demographic. As part of the New York pilot program, it offers free access to Amazon Fresh and Prime Pantry.

About the Report

Financial services and products not only play a key role in Amazon’s loyalty proposition but also present the company with numerous additional growth opportunities. Originally featured as part of the multifaceted report Amazon Strategies and the Amazon Shopper, 2nd Edition by Packaged Facts, this spin-off report focuses on Amazon financial services and payments consumer usage and engagement trends and related consumer usage and engagement strategies, as well as Amazon’s competitive positioning over time.

Amazon Strategies: Financial and Payment Services, 2nd Edition (published 10/2019, 102 pages) is available for $2,995 from Packaged Facts.

Media members please contact our Communications Manager Daniel Granderson at dgranderson@packagedfacts.com for a copy of the report summary. Businesses and individuals interested in purchasing the report can contact Research Specialist Frank Gaines at fgaines@marketresearch.com or visit Amazon Strategies: Financial and Payment Services, 2nd Edition.

About Packaged Facts

Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, and pet products and services. Packaged Facts also offers a full range of custom research services. Reports can be purchased at our company website and are also available through MarketResearch.com.

For more essential insights from Packaged Facts be sure to follow us on Twitter (@packaged_facts), LinkedIn, and YouTube.

 

 

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