E-commerce giant Amazon.com is reportedly in early talks to team up with JPMorgan Chase and other U.S. banks in a bid to launch its own checking-account-like product. Amazon hopes that the new initiative will appeal particularly to millennials and customers without bank accounts, The Wall Street Journal reports.
Interestingly, the idea of a new checking account comes a few days after a survey showed that more than half of Amazon shoppers would embrace using an Amazon-created cryptocurrency on the site.
The new product, which is essentially adding banking to the roster of services Amazon offers, is still early in development and may not come to fruition. It’s also unknown what other banking features it will contain, such as ATM access, as services included in the product are still to be determined.
It was also unclear how extensively the Amazon-branded checking account would overhaul its existing ecosystem which was recently extended to the home security, delivery, and healthcare spaces.
The partnership is the third between Amazon, the online retail giant known for disrupting major industries, and JPMorgan Chase, the largest bank in the United States by assets. These corporations are closely watched as whatever successes they have could become models for other businesses.
If Amazon were to launch its checking account version, the firm would be working only as a partner with existing financial institutions and “whatever its final form, the initiative wouldn’t involve Amazon becoming a bank,” the Journal said.
The report noted that if the process took off it could help eliminate fees Amazon pays to banks and payment processors. Furthermore, the move also gives the online retailer access to additional customer data, which would help grow its paid memberships and provide another incentive to stay locked.
The alliance between Amazon and J.P. Morgan is also a sign of just how e-shoppers are frustrated with the state of the current systems and the rapidly spiraling cost of online payments.
”The underlying goal is to further grow its Prime membership through cross-selling into existing J.P. Morgan customers and this could lead to more initiatives down the road,” Dan Ives, chief strategy officer at GBH Insights told CNBC. “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,” he added.