Alexa, Move My Bank Account To Amazon

Amazon May Be Taking The Plunge Into Banking, And By Any Estimation, It’s Likely To Change The Game For The Industry

- Gerard Du Toit

 Amazon may be taking the plunge into banking, and by any estimation, it’s a game changer for the industry. News reports that it seeks a bank for a cobranded, mobile-friendly checking-account-like product initially targeted to young adults in the US follow earlier moves into financial products. The company has a cobranded credit card offered by Chase, and Amazon Cash allows customers to deposit cash directly to their Amazon accounts from more than 10,000 retail locations throughout the US. In addition, Amazon has loaned more than $1 billion in the past year to small merchants selling online.

Amazon is now talking with big banks, including JPMorgan Chase & Co. This latest move raises urgent questions for retail bank and other financial services executives — and not only in the US:

Why is Amazon doing this, and what is likely to come next?

Will Amazon succeed, and how concerned should banks and other financial services firms be?

What should they do about it?

WHY AMAZON WOULD BOTHER

The checking and debit account components of a banking relationship are notoriously unprofitable, especially for a fee-free model aimed at younger customers who have little money to keep in the account. Most banks don’t relish serving this part of the market, but Amazon has several good reasons to do so.