The announcement that Amazon is considering providing free or low cost bank accounts to its customers surprised no one in financial services. Amazon has been rolling out bank-like products for years like lending options, Amazon Pay, prepaid and other products. What is interesting is that Amazon is going to dip their toe into the checking account industry (at least initially) through a partnership, not by acquiring a bank charter themselves.
Amazon has reportedly been in talks with several large banks to launch a “checking account-like product,” the Wall Street Journal reported Monday morning.
While the talks still aren’t aimed at Amazon becoming a bonafide bank, they are geared towards offering a financial product to younger customers who may not have access to a bank account, the paper reported citing people familiar with the matter. JPMorgan and Capital One are among the possible participants, the paper said.
Should Amazon launch a deposit product, it will be interesting to see what it does with the piles of data it could capture to steer additional purchases for all their customers.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
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