Recently, Alex Rampell, a general partner in the VC firm, Andreessen Horowitz spoke at Goldman Sachs’s Technology and Internet Conference. He said that in the long term, Amazon could be an industry leader in the payment and services sector. This is because Amazon already has preexisting loyalty and customer data from their Amazon Prime services. With the introduction of music and e-books into its Amazon Prime lineup, Amazon could potentially do the same with banking and payment services. Amazon could achieve this by offering low-debt payments or a no-frills bank (no minimum balance necessary) account to their customers.
Personally, while Amazon could potentially follow the footsteps of Apple (Apple Pay) and Google (Google Wallet) in which a major corporation shakes up the financial industry, I do not believe it would be wise for Amazon to offer low-debt payments or a no-frills account to their customers. What makes Amazon unique is not only because of its online shopping services, as well as its other Prime offerings, what makes Amazon unique is their R&D in future technologies. With the introduction of Amazon Alexa, the use of voice recognition and Artificial Intelligence to act as a customer’s daily assistant is an idea that can be expanded into Fintech. Recently at CES, Amazon has partnered with many companies to use Alexa as a voice assistant in home security systems, cars, fridges, and much more. As a growing industry leader in digital assistants, coupled with their data on customer’s spending habits, they could potentially create a Fintech solution that helps customers with their spending, and provide even lower offerings to them.
Sources:
http://www.readitquik.com/news/fintech/amazon-to-be-a-fintech-leader/
http://fortune.com/2017/02/14/andreessen-horowitz-fintech-alex-rampell-amazon/
As an e-commerce platform, Amazon is controlling multiple cash flows from the end-to-end supply chain. Amazon collects the payment from customer and on hold the payment to the sellers for a certain period, which creates an opportunity for Amazon to leverage the capital by the time difference. Also, I know that Amazon do provide loans to those qualified sellers for flexibility and turnover. We will wait to see what Amazon will do in the financial area.