Online retail behemoth Amazon is in talks with major banks about creating a checking account-type product to offer its customers. While talks are still in the early stages and nothing is definitive, a final product could mark another important new step in Amazon’s continuing drive to dominate the online retail industry.
While the idea of an Amazon checking account may not appeal to many people who are satisfied with their existing bank accounts, it could appeal to many people who don’t have bank accounts. Currently about 7% of American households are considered unbanked, meaning that no one in the household has a bank account. Around 20% of American households are considered underbanked, meaning that at least one person in the household has a bank account but the household still prefers to frequent payday lenders, money transfer services such as Western Union, or cash checks at non-bank check cashing businesses.
That means that there is a potential market for millions of Americans to open a checking account with Amazon, especially since many of the unbanked and underbanked households undoubtedly have Amazon accounts already. Amazon checking accounts would be just one more step that Amazon is taking to shake up the face of American retail. It could be a lucrative opportunity for whichever bank Amazon decides to partner with, or if Amazon decides to form its own bank to provide accounts it could move into and shake up the financial services industry.
Over half of Amazon customers in a recent poll also stated that they would be interested in and would use an Amazon cryptocurrency. Combining a cryptocurrency with checking accounts could be a real game-changer for Amazon. A proprietary cryptocurrency could enable customers to purchase goods and services across Amazon’s entire network of sites, enabling international purchases from Europe or Asia that otherwise would require foreign currency transaction fees.
And a non-proprietary cryptocurrency could gain wide acceptance within cryptocurrency markets, as anyone accepting the Amazon coin as payment would know that they could easily use it to make purchases on Amazon. Already, 64% of American households have Amazon Prime, and 75% of households who purchase online use Amazon, so an Amazon cryptocurrency could immediately see widespread use.
Having recently taken over Whole Foods, Amazon is making forays into traditional brick-and-mortar sales too. The company obviously has a vision for what it wants to do and how it envisions the future of retail, so it should be interesting to see whether any of its long-term plans come to fruition.