After ruining retail, Amazon is aiming to disrupt the banking business. The Wall Street Journal reports that the e-commerce platform is looking to partner with financial institutions like J.P. Morgan Chase to set up a branded “checking-account-like” product so its younger clientele can shop, even if they don’t have a traditional banking account.
Chief strategy officer and head of technology research at GBH Insights Dan Ives told CNBC in an email, “The underlying goal is to further grow its Prime membership through cross-selling into existing J.P. Morgan customers and this could lead to more initiatives down the road.” According to Ives, “Amazon is in fifth gear, trying to double down on the consumer and the finance vertical looks like the next step (through partnerships) of adding to the Amazon flywheel.”
Vertical Group research analyst Dick Bove speculated that the payment system “would be like the Apple Pay arrangement. Apple has a relationship with a number of banks, using their payment systems, but clearly, Apple is not in the banking business."
While talks with J.P. Morgan Chase are still very much in their early stages, one survey concluded that about 45 percent of respondents would be open to using Amazon as their primary banking account, while 49.6 percent said they would use an Amazon savings account. After the news, Amazon stock went up 1.6 percent while shares of J.P. Morgan rose by 1.5 percent.