Amazon is thriving in the financial sector with their Prime Visa, corporate credit lines, reloadable cash cards, gift cards and revolving credit lines. Now, Amazon is talking with JP Morgan about creating an Amazon checking account too. With Amazon’s focus on customer experience, they have created a massive loyal customer base and are increasingly looking at new ways to leverage customer loyalty. Bain reports that Amazon customers control about 75% of the total U.S. household wealth. With its reach and reputation, Amazon could seriously disrupt the financial industry.
In a recent study conducted by Bain, 65% of Amazon Prime members said that they would sign up for an Amazon banking account. The survey was conducted on 6,000 Prime Members. Amazon boasts that there are more than 100 million active Prime members worldwide. Amazon isn’t the only Ecommerce company moving into the financial sector. Alibaba has already seen success: “Over just four years, Alibaba’s repository for leftover cash from online spending became the largest money-market fund in the world, through its Ant Financial unit. Ant Financial has since moved further into consumer credit, with at least $95 billion in outstanding loans reported earlier this year.” -Toit and Cheris
Amazon’s financial push is another branch of their ever-evolving business model. It has expanded into a multifaceted, global ecommerce-logistics-tech-financial-cloud-advertising entity. It is also researching options to offer insurance in India and just this past week was announced as the third largest online advertisement platform behind Google and Facebook. If you’re interested in Amazon’s business model as a whole, Navazon has an interactive presentation detailing it that we may share in a future newsletter. Though U.S. and European anti-trust investigations are being initiated, it’s good to understand Amazon’s evolving business model and anticipate how you can best leverage it to your advantage.