Amazon.com Inc. (NASDAQ: AMZN) is in talks with JPMorgan Chase & Co. (NYSE: JPM) and other big banks such as Capital One Financial Corp. (NYSE: COF) about offering the tech giant a checking account for its customers, according to the Wall Street Journal, citing sources familiar with the matter.
Amazon is looking to target its younger consumers and people without checking accounts. The strategy will help Amazon lower its fees it pays to financial institutions and a window into customers’ income and spending habits, says the report.
Although, the sources told the Journal that the effort is in its early stages and may not come to fruition, but at the end regardless, Amazon will not become a form of a financial firm.
But if the strategy were to be implemented, then this would be another way of Amazon integrating itself into everyday lives of its consumers. Amazon has already taken over the eCommerce market, along with food, music, books, media and its bundle of Alexa-enabled products.
Amazon has even begun testing outs it own delivery system, which would make the company dependent from its current delivery providers, UPS and FedEx.
This has raised concern in many businesses and officials, saying that Amazon’s aggressive position in entering many sectors of the markets will hurt many businesses.
Amazon has already previously entered into the financial technology market with its applications. Amazon first started with Amazon Pay, which allowed consumers to pay for products via third party sites without having to reload their credit card information and has over 33 million users.
Then followed, Amazon Cash, which allowed consumers to add cash to their Amazon wallets and purchase items online without a credit card. And then Prime Reload, which gave customers a 2 percent bonus if they used their debit card to move funds from an account to their Amazon account.
For JPMorgan or Capital One, winning the assignment would be a chance to keep a potential competitor close and strengthen ties to a company that is popular among millennials, whose financial habits are changing quickly, said the Journal.
“It seems like another example of fintech collaboration with existing banks rather than a true disruption,” Guy Moszkowski, an analyst at Autonomous Research LLP, said in an email to Bloomberg.