Looks like Amazon founder Jeff Bezos isn’t satisfied with being a massive industry disruptor and is looking for more markets to tap into. Per a Wall Street Journal report, Amazon is in talks with big banks such as JP Morgan Chase & Co. to create a checking-account like product.
The process is still in its early stages and may not ever be completed, the report said. “Shares of U.S. big banks came under pressure in early trading on Monday from broader selloff in the market and the WSJ report,” Adam Sarhan, CEO of 50 Park Investments said. “Whenever you see a headline show up [with] Amazon coming in and offering checking accounts with JPMorgan, that triggers investors to sell first in the face of uncertainty and ask questions later,” he added.
In January, Amazon.com, Berkshire Hathaway Inc., and JPMorgan announced that they will form a company to cut health costs for hundreds of thousands of their employees.
According to the report, the e-commerce giant has been contemplating getting into the finance sector for years. In this direction, its new product is an attempt to attract younger consumers, mainly those without bank accounts. The company is trying to bring Amazon Pay to brick-and-mortar stores and is likely to begin with Whole Foods.
Amazon and JPMorgan were not immediately available for comment.
While the e-commerce company has jumped into a variety of new industries, including entertainment and shipping, it’s unlikely to do the same with banking, the report said. Instead, it would likely partner with a bank on the new product. Such a venture would add yet another entity to Amazon’s expanding portfolio, which now includes grocery stores and its digital assistant, Alexa.
“The underlying goal is to further grow its Prime membership through cross-selling into existing J.P. Morgan customers, and this could lead to more initiatives down the road,” Dan Ives, Chief Strategy Officer and Head of Technology Research at GBH Insights, told CNBC in an email. “Ultimately, Amazon is in fifth gear, trying to double down on the consumer, and the finance vertical looks like the next step (through partnerships) of adding to the Amazon flywheel.”
Following this news, shares of Amazon rose 1.6% on Monday, while J.P. Morgan added 1.5%.