What Banking Can Learn from Amazon Prime

By Mike Branton


Building a fair exchange of value in a subscriber-first ecosystem is a winner for consumers and Amazon.

If there’s one program that stands well above all others as the greatest marriage of a digital retail products selling platform and value-based subscription pricing, it is Amazon Prime.

The numbers don’t lie, making this claim easily justifiable.



In 2022, there were over 200 million Prime subscribers - 172 million of them in the US. The remainder are from 25 other countries.

At a $140 annual subscription fee, that’s over $30 billion in annual recurring revenue consumers gladly pay just to have access to the value that Prime delivers.

And it doesn’t stop there. The average rate of spending for a Prime member is $1,400 per year. Non-Prime members spend less than half of that, at just $600 per year. Based on a 2021 survey, here is a breakdown of the average amount Prime members spend at Amazon:

  • 31% of U.S. Prime members on average spent $51 to $100 a month
  • 26% spend less than $50 a month
  • 23% spend $101 to $200 a month
  • 13% spend $201 to $500 a month
  • 4% spend $500 to $1,000 a month
  • 2% spent over $1,000 a month



It means that consumers are so engaged and loyal to Amazon that they want to subscribe to a Prime membership to access and experience (on their own terms) the significant value in that membership. 

Consumers prove it by a high renewal rate AND comparatively spending more than non-members, whether that’s due to price, features, shipping, or convenience or a combination of all of these.

No doubt that Amazon has shifted the paradigm in not just online retail but has influenced several other industries as well – streaming media/music, software, cloud services, personal services, grocery delivery, roadside assistance, and even pet food – to provide enough value that consumers gladly pay to subscribe to have access to the inherent value of that subscription and then to experience that value however or whenever they choose to.



Banks and credit unions have been providing consumers and small businesses with checking accounts with tremendous intrinsic value for years. This intrinsic value has increased over time, most recently with digital banking and payment systems. 

With so much value in these services and increasing access and usage for customers, there is a great opportunity for financial institutions to offer subscriptions to these services and products. In fact, looking back, financial institutions could have pioneered subscription pricing for these services/products.

Yet, they didn’t. They chose to charge fees for these services, many penalty fees for not meeting a condition and/or a la carte fees for individual services. Instead of engendering customer loyalty and engagement like Amazon Prime, it did the opposite – it ticked off customers to be paying “fees”.

But this isn’t just a matter of phrasing subscription versus fees. When a financial institution charges its customers penalty fees or “nickel and dime” a la carte fees for a financial relationship, this doesn’t really encourage relationship-building loyalty. It makes them feel like there’s not a lot of value in the access and use of these banking products/services when in actuality there is! 

And they act on this perceived lack of value by shopping around at competitors for lower fees or no fees and/or complain when they’re charged fees despite the intrinsic value of the services/products they have.



For a FI to do this, it can’t just start charging monthly or annual subscriptions for products/services it currently offers and delivers that are unconditionally free today (remember the $5 month fee for a debit card Bank of America tried a few years ago that caused such consumer backlash, it stopped doing it almost immediately) or are free if they meet a condition to avoid the fee.

Banks and credit unions must find new sources of non-traditional banking benefits whose value isn’t perceived by consumers to be free. Once found, FIs need to then bundle them with all the great traditional products/services for a robust and differentiated product/service.

The template is there to follow with Amazon Prime – bundle traditional retail shopping value features (free shipping) with non-traditional shopping value features (streaming video, discounts at Whole Foods) at a reasonable price point. 

Over time, continue to add value and move up the subscription price to get the compounding effect of additional subscribers at an increasing price point.

There are other templates out there to study as well – Netflix, AAA, Spotify, and others.

This transition has already started in the financial institution space led by some neobanks and fintechs who have added product/service features (like early access to the paycheck) to differentiate and gain market share and scale. 

Once share and scale are gained, don’t be surprised to see them offer even more product/service differentiation with non-traditional services for a subscription price (some, like Dave, are already charging a subscription).

Fututre of Overdrafts Survey 2024 Download



Bankers, if they’re being honest, know that their consumer and small business marketplace has changed permanently, and it’s adapt or die time.

Some proactive community financial institutions have decided to move forward with the Prime model with great success. They’ve built ecosystems to deliver valuable “financial first responder” benefits like roadside assistance, cell phone protection and cyber insurance into their checking accounts. 

This forges deeper customer relationships beyond undifferentiated, transactional basis banking services. And their customers are gladly paying for a subscription to these financial first responder benefits bundled with basic banking benefits at monthly price points from $6-$8.

With ever-increasing competition, uncertain economic conditions, and revenue and earnings headwinds, now is the time for your FI to be more like Amazon Prime with its consumer and small business checking product than like the traditional competitor down the street.

Mike Branton is a financial expert and partner at StrategyCorps. You can connect with him at mike.branton@strategycorps.com