Amazon Is Planning to Create a Checking Account-Style Financial Product
- Author: Eleanor Harrison Mar 06, 2018,
Mar 06, 2018, 1:34
Amazon's talks with the big banks, which include JPMorgan Chase, are in the early stages and it is possible the product may never see the light of day, according to the Wall Street Journal, which first reported the news on Monday. With services like Prime Instant Video and Prime Music on offer alongside a recent slew of products coming from Amazon's acquisition of Whole Foods, it's clear the company wants to become their customers' one-stop shop for entertainment and shopping.
Talks have also taken place with United States credit card lender Capital One, the Wall Street Journal said.
Amazon already has a few services that might help illustrate its financial vision.
Amazon already offers a Prime rewards credit card from JPMorgan Chase that is issued by Visa. Consultants McKinsey past year described Amazon and other digital platform companies as a bigger threat to banks than fintech firms.
Investors will be watching whether or not Amazon does wind up doing more deals with big banks - and maybe even getting Bufffett to assist in any joint ventures as well.
Amazon may soon find yet another way into its customer's wallets. But again, Amazon is not trying to be a bank. Rather, it would focus on partnerships that would allow the company to expand into the financial sector while reducing the fees it pays banks and payment processors. This includes buying up Whole Foods previous year and recent plans to offer its own shipping service, which would reduce its need for United Parcel Service, Inc.
Probably the best way to read the Journal's piece is to go ahead and assume that whatever it says Amazon won't do and/or whatever it claims is still "unclear", Amazon actually will do.
Before you sell all your bank stocks.
[Amazon's] more-than $700 billion market value eclipses the combined value of JPMorgan and Bank of America Corp, the two biggest USA banks.
The company isn't attempting to form its own banking arm, at least not yet.