A new co-branded credit card called the Amazon Barclaycard was introduced by leading online retailer Amazon and Barclays with the goal of rewarding UK consumers for their regular purchases.

Amazon and Barclays: The convergence of ecommerce and finserv

The relationship is noteworthy because it demonstrates how financial services and e-commerce are increasingly combining.

With a tiered rewards program designed specifically for the company's clientele, it is Amazon's first entry into the consumer credit card market in the UK.

For the first year, cardholders receive 1% back on Amazon transactions and 0.5% back on other purchases; after that, the 0.5% back rate decreases to 0.25%.

As a thank you to Amazon's most devoted customers, Prime members receive an extra 2% back on purchases made on major shopping days like Prime Day, Black Friday, and Cyber Monday.

The new offering's focus on the needs of the consumer is highlighted by John Boumphrey, Country Manager for Amazon UK: "We're excited to introduce the Amazon Barclaycard, which is designed to give cardmembers ways to earn rewards for their everyday activities and Amazon purchases with no annual fee."

"We take great pride in providing our customers with value, which is why we're excited to launch a new payment option that lets customers save and earn on Amazon."

The card's easy connection with the Barclaycard app, where users can track and exchange their points for Amazon gift cards, demonstrates its digital-first philosophy.

A £20 (US$25) Amazon gift card is given as a welcome bonus to accepted candidates, demonstrating the application process's commitment to improving the user experience.

From a fintech standpoint, the alliance demonstrates how well-established financial institutions can work with internet behemoths to develop cutting-edge financial solutions.

"We're delighted to introduce the Amazon Barclaycard, the perfect credit card for anyone who loves to shop at Amazon and wants to be rewarded for doing so on their everyday spending," says Barclays Head of regular Money Management Steve Weston.

"This partnership demonstrates our dedication to providing customers with attractive offers as a component of our growth strategy for our credit card business in the UK."

In fact, the card's benefits go beyond simple incentives; it has no annual fee and offers 0% APR on purchases for the first six months. The card has a typical annual percentage rate (APR) of 28.9% after the promotional period, which reflects the current high interest rate environment.

Building upon an existing partnership

It's interesting to note that the Amazon Barclaycard expands on the two businesses' current alliance. Customers of Amazon UK may now stretch the cost of purchases exceeding £100 (US$125) across set monthly installments thanks to Barclays' "Instalments" service.

The announcement of the launch coincides with the growing rivalry that fintech startups and internet businesses vying for market share in financial services are posing to established banks.

Barclays partners with Amazon to obtain important purchasing data and a large client base, while Amazon improves its financial services offers without having to take on the regulatory burden of opening a bank.

Relationships such as this might becoming more frequent as e-commerce, banking, and technology continue to erase boundaries.