Friday , December 14 2018
Home / Digital Banking Reports / Footsteps of Amazon Bank

Footsteps of Amazon Bank

Teenagers, otherwise known as Generation Z, with their lack of debit and credit cards, their absence of bank accounts and their overwhelming preference for actually putting on clothes and going to physical stores to buy things they could purchase online, pose a big challenge to Amazon.

Amazon’s answer: The internet behemoth is in early discussions with banks including JPMorgan Chase & Co. and Capital One Financial Corp. to create a product similar to checking accounts, according to people familiar with the matter who requested anonymity. Amazon aims to tailor the accounts to appeal especially to youngsters and those who own no plastic in their wallets, the people said.
Debit Devotees
Consumers between the ages of 18-24 prefer debit cards to other forms of payments

“The sooner you can start collecting information on them, the better prepared you are,” said Tim Barefield, a managing director at the consulting firm Kotter International. “For Amazon, it’s another way to expand their brand. Their brand is reaching out every place that their tentacles can reach out to.”

The move shows Amazon’s recognition that digital accounts for minors potentially lock in lifetime customers before they even leave their parents’ house. Amazon is savvy about its users’ life cycles. It offers new parents discounts on diapers and baby food. It gives college students discounted Amazon Prime memberships, providing free shipping and access to streaming video so young adults will already be Amazon shoppers when they start making more of their own spending decisions.

Pseudo Card
Since many young people don’t qualify for credit cards, Amazon created a pseudo-debit card called Amazon Cash that lets teenagers drop off money at drugstores such as 7-Eleven Inc. and CVS Health Corp. and add it to an Amazon wallet they can use online.

But Amazon has long known the process is clunky and has wanted to take steps to make it easier for customers without bank accounts to shop on its website. Walmart Inc. and American Express Co. offer accounts called Bluebird that have made inroads with teens.

Amazon, led by billionaire Jeff Bezos, is trying to stay on top even as it had revenue of $178 billion last year, a 31 percent jump from 2016 and an almost 2,500 percent increase from 2004, when many of these potential new customers were born.

Service Charges
Children under the age of 18 typically aren’t able to sign up for a bank account without parental consent. Checking accounts for high school students often come with monthly service charges and overdraft fees.

So there’s a chance for Amazon to improve the banking experience, said Stuart Sopp, chief executive officer of Current, a startup that offers debit cards to teens.

“I’m sure Amazon is scaring the hell out of every single regional bank and credit union right now,” Sopp said. “The banks have very clearly not serviced these demographics, so there’s opportunity.”

Check Yes
Consumers said they were open to banking with Amazon, even if it came with a fee

If Amazon could deliver a better banking experience for digitally savvy youngsters who are used to getting what they want with a few swipes or clicks, they might have banking customers for a long time, said Eric Marks, a senior director at the financial consultancy West Monroe Partners.

Amazon might also entice teens with its personal assistant Alexa. Such devices are popular among teens looking for a convenient way to pay, said Gavin Rosenberg, a senior director at the payments processor Total System Services Inc.

“The younger generations are less concerned about privacy, so they’re more apt to use them,” Rosenberg said.

Source :

About Unal SEZER

Check Also

What is banks’ talent strategy?

Today’s graduates are looking for a personalized career experience. They want interesting and meaningful work …

Leave a Reply

Your email address will not be published. Required fields are marked *

20 − 5 =