Report: Amazon Researching A Banking Product
Amazon could be looking to partner with major Wall Street banks like JPMorgan Chase & Co. (NYSE: JPM) to offer its clients a "checking-account-like" service, CNBC said. Doing so would expand Amazon's portfolio beyond its core e-commerce platform — which already includes grocery stores and most recently the acquisition of Ring.
Why It's Important
A survey conducted by LendEDU found that about 45 percent of Amazon customers would be open to the concept of Amazon acting as their primary banking account, CNBC said. In addition, nearly 50 percent would use a savings account if Amazon were to offer one to its clients.
Dick Bove, a notable banking analyst at Vertical Group, told CNBC that Amazon has the capabilities to collect deposits so long as it doesn't issue any loans, CNBC said.
"I'd assume that if an arrangement is created that it would be like the Apple Pay arrangement," Bove said. "Apple has a relationship with a number of banks using their payment systems, but clearly Apple is not in the banking business."
Amazon's objective in developing a bank account could be consistent with its ongoing strategy of growing its Prime membership, Dan Ives of GBH Insights told CNBC in an email. Over time, Amazon may be able to cross-sell products and services with JPMorgan's customers, he said.
"Ultimately, 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," CNBC quoted Ives as saying.
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.