Amazon enters discussion with JPMorgan to offer bank accounts to users

Amazon is reported to be discussing a potential partnership to offer its customers bank accounts via JPMorgan Chase, in a deal that would marry America’s biggest e-commerce platform with the country’s biggest bank.


Amazon enters discussion with JPMorgan to offer bank accounts

The idea is to develop a checking account-like product, according to people familiar with the discussions, as it seeks to strengthen ties with millions of consumers who rely on the site for an increasingly large share of their day-to-day consumption – according to the FT.

Talks are at an exploratory stage, these people cautioned, and plans are likely to be complicated by discussions with the regulator, the Federal Deposit Insurance Corporation, and also matters such as “the Durbin amendment”, a Dodd-Frank provision that caps interchange fees paid to retailers for debit-card purchases.

But if Amazon succeeds in offering users access to some kind of bank account, it would mark another move in its steady incursion in to territory historically dominated by the big brick-and-mortar lenders.

Amazon has already pushed into loans to small businesses operating on its Marketplace platform, announcing last June that it had originated a total of $3bn since a low-key launch in 2011. Both Amazon and JPMorgan declined to comment on a possible tie-up.

“Amazon is one example of a big tech company . . . thinking about finance as not just a feature to help drive the purchase of goods on their retail platform, but perhaps . . . as a core business,” said David Klein, chief executive of CommonBond. The same could apply to Apple or Facebook or Google, he added.

“Data and finance work really well together, and if you have technology to learn quickly from it and then apply it that could be very attractive . . . whether they want to become a financial company in themselves or whether they want to monetise it with financial companies.”

Amazon could find a receptive audience. A recent survey carried out by Bain, found that nearly 60% of bank customers in the US were willing to try a financial product from tech groups they already use. Amazon and PayPal were the two brands consumers would most trust with their money, the survey found, ahead of Apple, Google, Microsoft, Facebook and Snapchat.

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