Amazon (AMZN) Gains As Company Eyes Bank Deals, Checking Accounts

A generic image of a person on their laptop Credit: Shutterstock photo

Shares of Amazon AMZN surged more than 1.2% in late-morning trading Monday after new reports linked the company to the financial industry, suggesting that the e-commerce behemoth's plans to launch new account services might include a major partnership.

Amazon has been in talks with JPMorgan Chase JPM and Capital One COF about its proposal to launch a product similar to traditional checking accounts, TheWall Street Journalsaid Monday. Citing people familiar with the matter, the report indicated that Amazon's target is younger consumers and people without existing bank accounts.

A dive into the financial sector would be another addition to Amazon's growing list of attempts to influence its customers' everyday lives. The move would also help the company avoid some of the fees it currently pays financial firms and learn more about people's income and spending trends.

But in talking to JPMorgan and Capital One, Amazon has shown that it does not intend to entirely disrupt the existing structure of the financial business.

"Why put up all the capital that's required to run a bank and why pick up all the extra expense and headache of running a bank when you can go to a Chase and any number of smaller banks and have them license their bank?," Ali Raza, managing principal at the payments consultancy Blue Leviathan, said to Bloomberg .

Amazon already has a few services that might help illustrate its financial vision. For one, the company offers Amazon Cash, a platform that lets users add cash to an Amazon wallet by displaying a barcode in person. This enables customers without a credit card to shop online.

Amazon also recently launched Prime Reload, which rewards users with a 2% bonus is they use their debit card to transfer money from a bank account to an Amazon balance. By handling the transaction themselves, Amazon can avoid paying fees to Visa V and Mastercard MA .

Want more market analysis from this author? Make sure to follow @ Ryan_McQueeneyon Twitter!

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Chase & Co. (JPM): Free Stock Analysis Report, Inc. (AMZN): Free Stock Analysis Report

Capital One Financial Corporation (COF): Free Stock Analysis Report

Mastercard Incorporated (MA): Free Stock Analysis Report

Visa Inc. (V): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.