Amazon Prime Membership Just Became Cheaper for Millions of People

Amazon is taking aim at Walmart by offering a 54 percent discount on Prime memberships for Medicaid recipients

Amazon is taking aim at Walmart by offering a 54 percent discount on Prime memberships for Medicaid recipients

Amazon has been working to offer more services for lower-income shoppers, including discounted Prime memberships and Amazon Cash.

Targeting low-income customers is a key part of the war between Amazon and Walmart.

Amazon announced plans Wednesday to slash the monthly cost of Prime membership for Medicaid recipients. Amazon also a year ago began a program to deliver groceries to food-stamp recipients. In cases like this, we can look at Prime as something of a loss leader for the company, with the idea being that a subscription to Prime encourages users to do more of their shopping through Amazon. Amazon does not report the number of prime members it now has.

Amazon has come under fire in the past for failing to accept EBT services.

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In that regard, offering a social benefit for people who may have more challenges getting to a store or affording faster shipping could become sound business, too, said Avi Greengart, an analyst at Global Data.

Under the offer, customers on Medicaid can get Amazon Prime for $5.99 a month, or $7 less than the new regular monthly fee of $12.99. Eligible shoppers need to reapply once a year and are eligible for up to four years.

"This is just about our customers and our members and giving them the best of Amazon with an incredible selection of benefits". Prime provides free same-day and one-day shipping, online streaming of thousands of movies and TV shows, unlimited photo storage and early access to select Lightning Deals. But customers won't be able to share their Prime membership with a second adult, as with a regularly priced Prime membership. A Morgan Stanley survey found 40% of Amazon Prime members spend over $1,000 a year on Amazon compared to 8% of non-Prime customers. When you consider the included subscriptions to Amazon Video and Music, this could also help those receiving government assistance save money in other areas, which is never a bad thing.

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