Amazon looking to offer customers a product similar to a checking account

Avatar By Susan Konig | 3 years ago

Online retail giant Amazon is once again venturing into new territory. The Wall Street Journal reports that Amazon is in talks with J.P. Morgan about creating a product similar to a checking account for Amazon’s customer base.

The product would initially be aimed at younger shoppers and people who do not have bank accounts. Amazon would not, however, be operating as a bank. It would be working as a partner with existing financial firms, the WSJ says. Since the project is in its preliminary stages, it is not yet clear what form the move would be taking–checking accounts, ATM access, etc. — or if it will even come to pass.

Were Amazon to launch its version of a checking account, it would cut the fees it now pays to banks and payment processors. For long-time Amazon customers, it provides another incentive to stay locked in to the company. It should be particularly attractive to  low-income customers, as larger banks raise their fees and minimums.

More than a few in the financial services industry have been expecting a move like this—at least in some form. With Amazon’s continued rapid-fire growth, it only makes sense that the company would set its sights on the financial sector. Many questions remain as to how such a partnership would work—particularly since a checking account is more complicated than a simple store-branded credit card.