Amazon on Wednesday said it will extend discounted Prime memberships to qualifying recipients of Medicaid. To qualify for a discounted $5.99 monthly Prime membership, customers must have a valid EBT (Electronic Benefit Transfer) or Medicaid card, according to an Amazon company blog post.
Qualifying Amazon customers can renew discounted membership every year, for up to four years, with the ability to cancel anytime, Amazon said.
Non-discounted Prime memberships cost $99 per year if paid annually or, monthly, $12.99 (which adds up to $155.88 for the year). Prime Video membership alone is $8.99 a month (or $107.88 a year). Students can get Prime for $49 annually, half the price of a regular Amazon Prime membership — and can now pay in monthly installments of $5.49 without a full-year commitment (which comes to $65.88 for a full year).
Amazon first devised a lower-cost Prime membership for consumers participating in government assistance programs in June. "We hope to make Prime even more accessible," Cem Sibay, vice president of Amazon Prime, said in blog post Wednesday, echoing then-Amazon Prime VP Greg Greeley's June comments. (Earlier this week Greeley announced he's leaving Amazon to lead Airbnb Homes.)
The move could be viewed as a challenge to Walmart, which has long developed services like check-cashing and money transfers to appeal to their customer base, which is typically older and less wealthy than Amazon’s. In its massive push to boost e-commerce sales, Walmart is gunning for Amazon’s non-Prime customers: about a year ago the company scrapped the membership-based Shipping Pass program, for example, replacing it with free two-day delivery on orders over $35.
Amazon swiftly responded, lowering its own non-Prime free shipping minimum back down to $35, then a few weeks later to $25, about a year after raising it to $50. This week, Target announced free two-day shipping without a minimum order nationwide.
Keith Anderson, VP of strategy and insight at e-commerce analytics firm Profitero, compares Walmart’s strategy of eliminating membership to streaming entertainment services that cater to cable television customers who would rather pay ala carte than hefty fees for a slew of channels they don’t want, akin to Amazon's membership and benefits. "For those households that haven’t already spend a membership fee, they’re still in play," he told Retail Dive. Sweetening Prime for those households, however, may take them out of play.