Ever wanted to know more about what Amazon is doing in financial services? CBInsights has put together an insightful report on what they know about Amazon’s foray into banking, financial services and fintech.
The report takes an in-depth look into Amazon’s product strategy delving into the company’s key financial pillars across payments, cash deposits, and lending. Here is what the report has to say about each product.
From payments to lending and from insurance to checking accounts, the authors of the report highlight that Amazon is attacking financial services from every angle without applying to be a conventional bank.
“Based on our findings, it’s hard to claim that Amazon is building the next-generation bank. But it’s clear that the company remains very focused on building financial services products that support its core strategic goal: increasing participation in the Amazon ecosystem.”
As a result, the company has built and launched tools that aim to:
1 Increase the number of merchants on Amazon, and enable each merchant to sell more.
2 Increase the number of customers on Amazon, and enable each customer to spend more.
3 Continue to reduce any buying/selling friction.
In parallel, Amazon has made several fintech investments, mostly focused on international markets (India and Mexico, among others) where partners can help serve Amazon’s core strategic goal.
In aggregate, these product development and investment decisions reveal that Amazon isn’t building a traditional bank that serves everyone. Instead, Amazon has taken the core components of a modern banking experience and tweaked them to suit Amazon customers (both merchants and consumers).
In a sense, Amazon is building a bank for itself, say the authors, and that may be an even more compelling development than the company launching a deposit-holding bank.
Amazon has aggressively invested in payments infrastructure and services over the last few years. Making payments more cash efficient for Amazon and frictionless for customers is a key priority. Today, Amazon Pay has evolved to include a digital wallet for customers and a payments network for both online and brick-and-mortar merchants.
To find out more about Amazon Payments, you can view the report here.
The Amazon Cash program bridges the gap between online commerce, using debit or credit cards as payment, and offline commerce that relies on “cash on delivery” options like cash and gift cards.
Amazon Cash launched in April 2017 to allow customers to deposit cash, without a fee, to a digital account by showing a bar code (either printed physically or digitally) at a partner brick-and- mortar retailer such as CVS, 7-11, and others.
To find out more about Amazon Cash, you can view the report here.
Jeff Bezos has been more forward about Amazon’s desire to build out its lending arm than other financial service offerings. In his 2016 annual letter to shareholders, Bezos outlined Amazon’s goal of expanding Amazon Lending: by continuing to work with partner banks to manage the bulk of the credit, the retailer can mitigate credit risk and calm investor nerves.
Today, Amazon has expanded lending to US, UK, Japan, and India and to US consumers in the form of partner cards.
To find out more about Amazon Lending, you can view the report here.