Amazon never seems to stop! Quick Loans Express explores whether the next achievable thing for them is an Amazon Bank.

Story Highlights:

  • Amazon Lending offers short term business loans from $1,000 – $750,000
  • 73% of millennial were excited of the prospect of new financial services from Amazon, Google or PayPal
  • Regulations can save traditional banks from their anticipated threat of an Amazon Bank.

An Amazon Bank?

Is there anything that Amazon won’t do? It looks like Amazon won’t be stopping with their Amazon Prime, Amazon Echo, Amazon Dash, or even their Amazon Go store. From gadgets to music and video streams, you might be thinking whatever next?

Amazon are very good at getting you to spend your money, surely the next thing is for them to regulate your money. There is speculation that the next thing for Amazon is an Amazon Bank!

Quick Loans Express, a quick loans for bad credit, discusses the chances of this happening and whether traditional banks should dread the day huge companies like Amazon take over the banking sector.

Is Amazon already a bank?

Amazon already offers certain financial services to different people around the world. For example, in the UK, consumers can apply for an Amazon Platinum Mastercard. They can collect points when they shop and benefit from the perks. However, Amazon don’t own the credit, they offer the Mastercard on behalf of NewDay Ltd and they act as a broker.

Furthermore, on an invitation-only basis, Amazon Lending offers short term business loans from $1,000 – $750,000 to businesses that sell products on the Amazon platform. So far, they have already loaned over $3 billion. Small businesses in the USA, UK and Japan received these small loans. However, compared with other mega banks this is a relatively small amount in the same timeframe. One mega bank JPMorgan loaned $130 billion.

In places such as India and Mexico, Amazon offers unique payment services. They also address local start-up companies by investing in them. It is also possible to store your money in a digital wallet with Amazon in Mexico.

How soon are we expected to see the Amazon bank?

Seeing as Amazon is already offering credit cards, payday loans online, digital wallets and other financial services, its seems only natural to venture into banking properly. Ken Leon, a CFRA bank analyst predicts that Amazon may buy a small or mid-sized bank in 2018. This will hellp them to gain ground in the industry and test the regulatory waters. However, this may either act as a step-up to the banking industry or it can be a broad jump. Buying a small or mid-sized bank could result in a calamity for the company.

Others are more sceptical that Amazon will get a banking license and be able to offer mortgages and other traditional banking services soon.

If Amazon were to not pass regulations to open their own proper bank, they may become the interface between the consumer and the banks – the banks will be the ‘ingredient brand’ and Amazon may face losing their stamp on the banking services.

Should traditional banks be worried?

In a Bain & Company Survey of more than 133,000 banking customers in 22 countries, the participants were asked if they would trust Amazon or PayPal with their money. 55% of Americans said they would. 73% of millennial were excited of the prospect of new financial services from Amazon, Google or PayPal rather than using their bank.

It seems that Amazon pose an existential threat to the traditional banks. The banks have been preparing in case these big companies like Amazon or Google enter the banking sector. However, the chances of companies stealing the profit from traditional banks if they were to open a bank is very high. There may be no way for them to withstand their growth in the financial sector.

Will regulations stop Amazon becoming a bank?

Regulations can save traditional banks from their anticipated threat of an Amazon Bank. It is likely that regulations set down by financial watchdogs, like the FCA which regulates instant payday loan industry , could stop Amazon becoming a major bank. For example, there is already a regulation in the US that prohibits companies in commerce engaging in banking activities. Hence, Walmart has never been able to offer certain services. The regulations are set in place for fear of the companies siphoning deposits or offering risky loans.

Time has changed and deviations in regulations may not be far behind, especially in the US. Keith Noreika, the temporary head of the Office of the Comptroller of the Currency (OCC), the agency that oversees U.S. national banks has already requested change in 2017.  

However, this does not mean things will change. The regulatory boards still hold the upper hand and traditional banks should not panic yet! Amazon is still far away from dominating the banking industry and its unlikely that this tech giant would crush the regulated traditional banks any time soon. But it may not be too far in the distance and the banks need to be cautious.

Conclusion: Amazon Banking

In this article, Quick Loans Express, discuss the next step Amazon is expected to take – particularly becoming a bank. However, despite Amazon looking towards a banking future, they must pass quite a few hurdles to become a leading bank. They have already offered many different financial services to small companies and people around the world. However, although it appears that they are getting big, major banks still surpass them in terms of profit. The future does look bright for Amazon and if they can get an Amazon bank off the ground, it appears that to Amazon, the sky is the limit. Watch out for more.

Taylor Rose
Taylor has been an avid writer since her early school days. At 5, she was creating candy floss planets where heroic candy canes stood up to the evil Russel Sprout. Later, she was documenting historic events, and her writing was always appreciated by all who read it. After working as a program developer for many years, she traded her successful career to make a living out of her writing skills. Nowadays, Taylor helps the Quick Loans Express blog bring current and useful information to people looking for helpful financial advice online – hopefully with a fun twist!

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