Amazon, 2018’s go-to example of capitalism run amok, is reportedly eyeing a new industry to muscle in on: Personal banking. According to The Wall Street Journal, the online retail giant has approached several large banks about creating a “checking-account-like product” aimed at “younger customers and those without bank accounts”.
Photo: Drew Angerer (Getty)
The goal, it seems, is to launch a partnership with a traditional financial institution that would stop short of Amazon becoming a bank itself. And while the Journal‘s story only mentions preliminary talks so far, there’s reason to take Amazon’s intentions seriously. One of the banks reportedly approached was JP Morgan Chase, a friend of the Bezos show that recently announced a joint effort (along with Warren Buffet’s Berkshire Hathaway) to build a healthcare company with Amazon, which the companies’ own employees would be serve as guinea pigs for.
This wouldn’t be the company’s first foray into financial services, either. Amazon already peddles branded credit cards in the US (issued by Chase) which offer cash advances at a variable rate estimated at a steep 26.24 per cent APR. There’s also Amazon Pay, which is set to roll out more broadly at the company’s growing array of cashierless convenience stores and, potentially, Whole Foods locations.
At this point, it’s unclear what an Amazon debit account would look like, or how much of its consumers’ data would be shared with other arms of the business. The ability to gather personal data on the spending habits of the young and unbanked, however, would likely be at least as valuable to Amazon as a means to circumvent the fees it pays to payment processors and banks.
A foray into the checking account game also reads as another salvo in the protracted market war between Amazon and Walmart in the US. The latter has been involved in personal spending cards and check-cashing through Green Dot Bank since late 2014. The two Goliath retailers have long been duking it out in the shadows over logistics supremacy.
For better or for worse – but almost certainly the second one – consumers are content to let Bezos facilitate their spending. It remains to be seen if they’re comfortable letting Amazon hang onto the rest of their wages.