Amazon Could Become the Next Big Bank
The e-commerce giant is positioning itself as a potential financial juggernaut
After taking on industries like publishing and groceries, e-commerce giant Amazon has turned its sights on the financial industry. As Steve Cocheo, executive editor of the Financial Brand, wrote in 2018, Amazon is quickly becoming a formidable financial institution: “Nothing can stop Amazon. Not even banking regulators or geographic borders can slow them down. With patents, patience, a willingness to fail, a huge and devoted customer base, a universe of data, and gobs of money, Amazon represents a real threat to the traditional banking industry.”
Let’s take a closer look at what steps Amazon is already taking to make waves in the finance.
Amazon, the lender
Since 2011, Amazon has provided loans to the small businesses in its online marketplace. These loans, which are offered by invitation only, range from $1,000 to $750,000 and can last for up to one year.
As CNBC reported, Amazon’s 2018 outstanding loans totaled $692 million. It’s a small figure compared to the lending programs of major banks, but the number represents a sizable customer segment that Amazon has thus far taken from larger financial institutions.
