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- amazon banking product line - What’s the Fuss? Amazon Already Offers Full Suite of Banking Services

Amazon made headlines around the banking/fintech world this week following a WSJ story Monday about a rumored collaboration with Chase Bank and/or Capital One. The click-bait title, Next Up for Amazon: Checking Accounts (apparently revised from the title embedded in the hyperlink, “Are You Ready for an Amazon-branded Checking”) made it go viral in the United States, at least with news organizations.

- wsj amazon checking - What’s the Fuss? Amazon Already Offers Full Suite of Banking ServicesThe facts were less exciting than the headline. Apparently the ecommerce giant issued an RFP last year seeking suppliers of a “hybrid” checking account aimed at younger and unbanked (it’s unclear whether that is a single segment “young and underbanked” or two segments, “young” and/or “underbanked”). And there was no indication that any new product was coming now, or ever.

There is one thing missing in the 0+ stories that appeared in the wake of the WSJ piece:

Amazon already is a bank in everything but the name

Here’s a list of its current financial and payment offerings:

  • Amazon Pay: Used by 33 million to pay for goods at non-Amazon sites
  • Amazon Gift Cards: Available at brick & mortar retailers all over the country (I’ve bought more of those than all other gift cards combined)
  • Amazon Store Card, with financing option on qualified purchases: Issued by Synchrony Bank
  • Amazon Cash, a virtual debit card which allows cash deposits to the Amazon Pay wallet
  • Amazon Rewards Visa Signature Card, an affinity card issued by Chase Bank (also Amazon Prime Rewards card)
  • Amazon Prime Reload, which pays a 2% bonus for cash deposits into Amazon Pay
  • Amazon.com Corporate Credit Line: A way for businesses to pay for Amazon purchases via monthly consolidated billing, underwritten by Synchrony Bank
  • Amazon Lending: Which has originated $3B to smaller merchants since 2011 (cited by Bloomberg, sourced to CB Insights)
  • Credit Card Marketplace: Hadn’t seen that before, includes Amazon co-branded cards along with Discover and American Express
  • Gift Card marketplace: Hundreds of prepaid gift cards from other retailers along with restaurants, travel, and entertainment providers
  • Amazon Currency Converter: For purchasing on Amazon.com in local currency
  • Amazon Allowance: Tool for parents to enable their kids to pay directly (link was broken so not sure the status)
  • Shop with Points: A number of major banking rewards programs can shop directly at Amazon with their bank-provided points including Citibank, American Express, Chase and Discover
  • Alexa: Supports banking and payments info (aka skills) from a number of financial institutions including Capital One, US Bank, and American Express

The only major retail banking service missing, a stand-alone debit card (although you can already link a debit card to your Amazon account). Which I’m guessing is the core of the RFP mentioned by the Wall Street Journal.

Bottom line: Amazon is already deeply involved in banking and payments, as are most major retailers. Gift cards, co-branded credit cards, and SMB credit products are already being used by millions of . Adding a debit card and/or “hybrid checking account” isn’t going to make them any more menacing as a competitor. The prime concern for banks is whether Amazon can move payment volume from bank-issued credit cards, where the industry enjoys healthy profit margins, to debit/ACH with narrow-to-non-existent margins.


Author: Jim Bruene (@netbanker) is Founder & Advisor at Finovate as well as Principal of BUX Certified, a financial -experience accreditation program. 


 





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