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If you thought Wal-Mart, Google or Amazon couldn’t get anybigger, you would be wrong. Increasingly, companies are venturing into thelucrative consumer and commercial banking business. For example, Wal-Martannounced this week that the store will offer a prepaid credit and debit cardthrough American Express and will offer many of the traditional features of atypical bank checking account. On the other spectrum, Google and Amazon havebegun offering businesses in the United Kingdom loans of up to $10,000 to useon purchasing Google Adwords and expending lines of credit to small businessrespectfully.
Dan O’Malley, founderand CEO of PerkStreet Financial believes that the moves by the big technologyand retail giants are simply the result of the changing payments landscape.O’Malley says, “Money has gone digital. The core unit of banking in our economyis not paper. Companies that are digital are at a distinct advantage in thecurrent financial services ecosystem.” He continues, “Big banks continue tocater to the wealthy and medium-sized banks continue to cling ontobricks-and-mortar branches, and because of that, the average consumer islooking for better options.”
However the moves by Wal-Mart, Google and Amazon are justthe beginning and require support from existing members in the financial servicesmarket like American Express assisting Wal-Mart with its new line of financialproducts. While no one is expecting these types of companies to start buildingbranches and converting into more traditional financial institutions in thenear future, it is a possibility over the long run due to the shifting consumerpreference for new payment options.