The next deflationary front: Amazon dips its toes into banking

Reuters

Reuters

Amazon is reportedly in talks with banks including JPMorgan Chase and Capital One about creating a product similar to a checking account that its millions of customers could use.

The product, says the story, would be focused on those not yet swept up in the traditional financial services industry, but wouldn't include Amazon actually becoming a bank. The Seattle-based behemoth is apparently looking to collaborate with big institutions like J. P. Morgan Chase to offer checking accounts to customers. Amazon didn't immediately respond to an emailed request for comment outside of normal business hours in Seattle.

It wouldn't be Amazon' s first foray into the financial sphere.

Bank stocks barely budged Monday on the reports.

The benefits of such an account for Amazon's current customers are unclear at the moment but product discounts, faster payment processing and the potential elimination of standard checking account maintenance fees all seem like distinct possibilities.

The company is already the most dominant force in online retail - and arguably retail in general.

Dick Bove, a notable banking analyst at Vertical Group, told CNBC that Amazon has the capabilities to collect deposits so long as it doesn't issue any loans, CNBC said. Sure, Amazon has its own rewards credit card, but that's par for the course for any major retailer. But remember, Amazon is not trying to be a bank.

Buffett also owns big stakes in Bank of America, American Express, Bank of New York Mellon and Goldman Sachs.

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