Amazon in banking and insurance
Amazon (AMZN) is exploring launching a banking service that would appeal to young people and those without traditional bank accounts, according to recent reports by The Wall Street Journal and Bloomberg. The reports about Amazon venturing into the banking business, most likely with a checking account product, came a few months after Amazon, JPMorgan Chase (JPM), and Berkshire Hathaway (BRK.A) (BRK.B) announced that they were teaming up on a healthcare insurance program for their employees.
Looking for comment from Amazon
Amazon is reportedly in discussions with JPMorgan Chase and Capital One Financial (COF) regarding the envisioned checking account product. Amazon, which is set to release its 1Q18 results, has not confirmed or denied reports about working on such a product—we’ll have to wait and see.
Over $250 million in transaction cost savings
Creating a checking account product could save Amazon more than $250 million a year in transaction costs, according to a CNBC report citing a note from Wall Street’s Bain & Company. Amazon’s transaction costs savings could come from the company avoiding some credit card interchange fees, and this could go a long way in boosting the company’s profitability.