The e-commerce giant is reportedly in talks with JPMorgan Chase to offer bank accounts to its customers.
A moment long forecasted in financial services seems to be drawing near: Amazon is looking at rolling out bank accounts.
According to an article in the Financial Times, published yesterday, the tech giant is in talks with JPMorgan Chase to develop a checking account-like product. The article is based on comments from people familiar with the discussions.
The article described the talks as at an “exploratory stage”, with significant regulatory barriers still to overcome. Neither Amazon nor JPMorgan provided comment on the article.
This would not be Amazon’s first foray into the financial services sector. The company has quietly become a major player in online lending to small businesses, announcing last summer that it had originated $3bn in loans since launching the service in 2011. For context, leading marketplace lender Funding Circle only recently passed the $5bn mark globally.
Amazon’s entry into the world of banking is a development that will frighten both neo-banks and high street banks alike. It is expected that the company will be able to leverage the popularity of its commerce platform to quickly tap into vast swathes of tech-savvy customers.
The news of Amazon’s talks with JPMorgan comes just a week after it was revealed that Virgin Money, part of Richard Branson’s Virgin Group, spent £38.3m on a digital bank-build in 2017. We do not yet know much about Amazon’s efforts, but it seems self-evident that its bank will be a digital one.
The likes of Amazon, Google and Facebook entering the financial services sector is, to quote AltFi’s David Stevenson, a “common fear meme” within the fintech sector. But with its lending business well under way and a bank account offering seemingly not far off, Amazon looks set to render those fears justified.