The new Amazon Prime Store Card Credit Builder won’t just build credit

The payments industry is buzzing about the new Amazon Prime Store Card Credit Builder issued by Synchrony Bank.

Why:

For one, the card is unique. I can’t recall another private label secured store card – certainly not one with a partner the scale of Amazon. However, I’ve long thought secured cards should play a bigger role as the first step in the consumer credit journey. As to why they haven’t, well “the numbers just won’t work” is the conventional wisdom regarding profitability…at least until now.

Even though the buzz around this card is just kicking off, Comperemedia began observing letters approving applicants for Amazon Prime Store Card Credit Builder back in February. Interestingly, this card has been brought to market by stealth without the loud press announcements or advertising that typically accompanies a new product.

The launch is a smart move by Amazon to capture consumers looking to establish or re-build credit, and lock them in with other Amazon products once they build up history. Applicants for the Amazon Prime Store Card Credit Builder who fail to qualify are no longer turned away, but given another chance with Credit Builder and a secured line of credit of up to $1,000. This ensures that Amazon is the default card in the Amazon app and online. If cardholders make seven consecutive on-time payments, Synchrony then evaluates them for an upgrade. Not only is this building credit for the consumer, but it is building long-term trust and loyalty for Amazon.

The Amazon Prime Store Card Credit Builder also demonstrates the synergy achievable through partnerships – in this case, Amazon, Synchrony and TransUnion, coming together to unlock value for the consumer. Synchrony, which provides the credit building, is as much a part of the value proposition as Amazon, with 5% back for Prime Members. Furthermore, both Amazon and Synchrony have worked with TransUnion to provide complimentary access to TransUnion’s CreditView Dashboard – a tool for checking credit scores, setting up alerts and accessing credit education.

The challenges:

The downside to consumers is that it can only be used at Amazon. Amazon is working with three issuers for its six credit cards (Synchrony, Chase and Amex), which may be a challenge and could lead to consolidation in the future.

Looking ahead:

• Will Amazon follow up with a general purpose co-brand version of this card that can be used elsewhere? Maybe.
• Will Amazon be able to connect the dots between the Synchrony store cards and the Amazon Rewards Visa Signature cards (issued by Chase) in order to map out a fully integrated credit journey for Amazon customers? Let’s see.