Amazon in talks about creating bank service aimed at young consumers

Amazon execs are talking to JP Morgan Chase about creating a bank service aimed at young consumers, according industry insiders.

The e-commerce firm is pressing ahead with plans to open a banking service with talks underway with a number of financial institutions, including financial services giant JP Morgan Chase.

Last year Amazon considered buying the US bank Capital One, highlighting the appeal of the banking sector to Amazon.

This week the Wall Street Journal revealed Amazon is in talks with several financial institutions about opening an Amazon branded account.

And many of its regular customers seem to agree: global research from Accenture reveals half of all Amazon users would consider a savings account with Amazon, and 45% are open to the idea of it being their primary bank account.

ParcelHero’s Head of Consumer Research, David Jinks MILT, said:”It’s not only in the US Amazon might be eyeing up the banking sector: As a result of the loosening of British banking regulations in 2013, an A-Z of new online banks from Atom Bank to Zopa have been announced here in the UK. Amazon could consider creating its own British bank from scratch, but that would involve overcoming significant regulatory hurdles. A number of those ‘newbie’ UK challenger banks are already consolidating, and some may well welcome an approach from Amazon.’

“Amazon is already a fully-fledged money lender to retailers. It has made loans totalling well over $1.5bn to merchants in the US, UK, Europe and Japan. And it also already has its own UK credit card: the Amazon Platinum Mastercard gives reward points whenever users shop on it. Behind the scenes it’s actually run by NewDay: but were Amazon to run its own banking services, access to full credit card information would give it even more vital data about its customers’ shopping behaviour.

“Industry analysts are already getting excited about the prospects for an Amazon bank. Amazon could become the third-biggest US bank if it wants to, according to a Bain & Company report. I certainly wouldn’t bank on Amazon not having a significant online banking presence in the next five years.”

RELATED 

How the UK Economy Can Grow With Big Engineering Projects

Leave a Reply