The Wall Street Journal recently bared that Amazon has reportedly started to talk to banks such as JPMorgan Chase and Capital One to tie up for a checking account-style product for its millions of customers.
JMC through its unnamed sources said the talk is still on its infancy stage and that services to be included in the deal has yet been fully discussed by the parties.
March 2018 – The sources said the move of Amazon is aimed at the younger people who do have any bank accounts.
For years financial experts already speculated that Amazon and tech giants would eventually venture into the banking business.
So far tech giants are only involved in payments and lending.
One reason why many tech giants have yet to go into banking is due to regulatory barriers.
But Amazon has apparently found a way to avoid regulatory barriers by partnering with a traditional lender instead of directly competing with a bank.
The WSJ said partnership between tech giants and banks is not new such as Amazon partnering with JPMorgan Chase for its credit card services.
It was also reported that Capital One is using Amazon’s cloud services.
For the banking partner, the tie-up would offer a path to a swathe of new young clients, while for Amazon it could help slash the fees it pays to banks and payment processors, says the WSJ.
The partnership between Amazon and its partner bank is both beneficial to the two parties.
The bank would get new young clients while Amazon could slash the fees it pays to banks and payment processors.