From The Wall Street Journal:
Amazon.com Inc. is in talks with big banks includingJPMorgan Chase & Co. about building a checking-account-like product the e-commerce giant could offer its customers, according to people familiar with the matter.
The effort is still in its early stages and may not come to fruition, the people said. The talks with financial firms are focused on creating a product that would appeal to younger customers and those without bank accounts. Whatever its final form, the initiative wouldn’t involve Amazon becoming a bank, the people added.
If the product emerges, it would further inject Amazon into the lives of those who shop on its website and at its Whole Foods grocery stores, read on its Kindles, watch its streaming video and chat with Alexa, its digital assistant. Offering a product that is similar to an own-branded bank account could help reduce fees Amazon pays to financial firms and provide it with valuable data on customers’ income and spending habits.
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Amazon has been considering a bigger push into finance for years, looking to reduce the fees it pays banks and payments processors, people familiar with the matter said. Providing Amazon customers with a checking account from which they could directly withdraw cash for purchases could help to reduce some of those fees. But there isn’t much precedent for this type of arrangement. It is much more complicated than, say, a co-branded credit card.
Converting its shoppers into financial account holders could also aid Amazon as it ramps up its efforts in payments, a fragmented space with no clear winner yet. The company has had limited success in getting its own system, Amazon Pay, accepted at other online merchants.
Link to the rest at The Wall Street Journal