Amazon Wants to Parnter With a Bank on a Checking Account-Like Product
Do you have your bank account saved on your Amazon account? Amazon wants to save you a step. The Wall Street Journal reported Tuesday that Amazon is in talks with some big banks, hoping to create a checking account-like product that Amazon customers could use in paying for things they order from the giant online retailer. The product would be aimed at younger customers.
The move would allow Amazon to make it easier for customers to pay directly from the linked account, but it also could save the retailer significant money in interchange fees, according to analysts at Bain and Company. If enough customers used the service and paid through it instead of using credit cards, the company could save hundreds of thousands of dollars, a report released Tuesday by Bain said.
“Beyond that direct cost saving, we could imagine Amazon’s banking services growing to more than 70 million US consumer relationships over the next five years or so—the same as Wells Fargo, the third-largest bank in the US,” Bain analysts wrote. “The estimate assumes that slightly more than half of Amazon’s estimated US customer base chooses a financial relationship with the firm—the same share of people who said in our new global survey that they expect to buy a financial product from a major technology firm over the next five years.”
The consulting firm McKinsey and Company predicted this – writing in a report back in October that one of the biggest challenges for the retail banking industry in the near future would be “the rise of nonbanking platform companies targeting the most profitable parts of the banking value chain.”
“By creating a customer-centric, unified value proposition that extends beyond what users could previously obtain, digital pioneers are bridging the value chains of various industries to create ‘ecosystems’ that reduce customers’ costs, increase convenience, provide them with new experiences, and whet their appetites for more,” the McKinsey report said. “Not only do they have exceptional data that they exploit with remarkable effectiveness but also, more worrisome for banks, they are often more central in the customer journeys that include big financial decisions.”
Alexa, How much money do I have?