Amazon Cash's secret weapon is the Apple wallet

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Amazon is lending its considerable brand and heft to a cash payment model that borrows a vital piece of real estate from Apple Pay.

Called Amazon Cash, the feature allows cash-carrying consumers to add funds to their Amazon.com balance by presenting a bar code to a cashier at a network of partner retailers. Users tell the clerk how much cash to add, between $15 and $500 at once, and the funds arrive instantly in an Amazon.com stored-value account.

Systems like this are not new, and earlier models relied on consumers setting up a cash load online and then presenting a printed receipt, as was the case when Walmart introduced a similar service in 2012. Amazon's twist is keeping the experience decidedly digital, allowing consumers to store a reusable Amazon Cash bar code in Apple's wallet app or on the home screen of Android devices.

Andrew Harrer/Bloomberg

Amazon Cash debuted Monday in the U.S., and the initial retailers include CVS, Speedway, Sheetz, Kum & Go, D&W Fresh Market, Family Fare Supermarkets and VG's Grocery.

Besides bearing similarities to Walmart's Pay with Cash service, Amazon Cash also resembles PayPal's MyCash card, which charges a nominal fee upfront for digital in-store prepaid loads to PayPal's account, and is a major part of PayPal's efforts to build a market among underbanked consumers. The key differences for Amazon: There are no consumer fees, and there is no physical card.

"It's a bit of a defeat for PayPal, which is increasingly catering to the needs of the unbanked and would had loved to do a deal with Amazon to enable the unbanked to purchase there," said Rick Oglesby, president of AZ Payments Group.

Amazon Cash also shares traits with PayNearMe, which works with a similar network of retailers but markets its service more for bill payment than e-commerce. Amazon's service could also be an alternative to prepaid card companies such as Netspend and Green Dot, whose products can give unbanked consumers access to e-commerce.

"Amazon's service is open to anyone who has a mobile phone," said Richard Crone, a payments consultant. The system adds authentication through the phone credentials, the Amazon login and the consumer showing his or her phone at the retailer, he noted. "It pushes the entire prepaid market to up its game."

Amazon can also pair the program with its strategy to build a brick and mortar footprint by tying some elements of traditional retail with its e-commerce brand. Amazon is building Go, an experimental store that doesn't require a checkout, instead using in-store sensors to charge a user's Amazon account for in-store shopping. Amazon is also opening a chain of bookstores, and is expanding its distribution and fulfillment network in the U.S.

Amazon did not reveal terms of its deals with retailers, and did not return a request for comment by deadline.

The launch of Amazon Cash comes at an unwelcome time for the traditional brick-and-mortar industry, as Amazon becomes larger than most big-box chains combined, and many big-box chains face traffic slumps and closures.

"Consumers can access to Amazon for whatever you want to buy. And if Amazon takes this to its move to open stores, they can squeeze out even more," Crone said. "It would be like Trader Joe's for Amazon."