From the Wall Street Journal, June 13:
Corporate coins could take payments activity away from banks and the traditional financial system
Why the retailers are interested
The Latest on CryptoSome of the biggest merchants are exploring how to issue or use stablecoins, potentially shifting the high volumes of cash and card transactions that they handle outside the traditional financial system and saving them billions of dollars in fees.
Walmart, Amazon.com and other multinational giants have recently explored whether to issue their own stablecoins in the U.S., according to people familiar with the matter.
Expedia Group and other large companies such as airlines have also discussed potential efforts to issue stablecoins, some of the people said.
A move to launch a payments system by Walmart or Amazon that bypasses the traditional payments system would send shivers through the nation’s banks.
With vast networks of customers and employees, troves of data and far lighter regulations, retail and technology companies have long been viewed as particular threats to banks, including regional and community lenders.
Stablecoins are currently used to store cash or purchase other cryptocurrency tokens. They are supposed to maintain a one-to-one exchange ratio with dollars or other government currencies, and are backed by reserves of cash or cash-like assets such as Treasurys.
The retailers’ final decisions would depend on a bill, called the Genius Act, which would begin to establish a regulatory framework for stablecoins. The bill recently passed another procedural hurdle but still needs to clear the Senate and House.
Why the retailers are interested
Stablecoins could allow merchants to circumvent traditional payment rails, which cost them billions of dollars in fees each year, including the interchange fee they pay when customers make purchases using their cards.Payments can take days to settle, delaying the time it takes for merchants to receive the proceeds from sales. Stablecoins offer the possibility for a quicker process. They could be of particular interest to merchants with suppliers who are located abroad.
Merchants have long tried to launch payment alternatives to get around the card-based system that is dominated by Visa and Mastercard, though most of those have failed to gain traction.
Amazon’s efforts are still in the early stages, a person familiar with discussions said, and some of the talks have centered on having the company’s own coin for online purchases....
....MUCH MORE
In the case of Amazon in particular it has been a long time in coming.
From CB Insights:
From payments to lending to insurance to checking accounts, Amazon is attacking financial services from every angle without applying to be a conventional bank. In this report, we break down what it's doing to support merchants and consumers, from cashierless payment terminals to health insurance for sellers in India.
In 2017, Andreessen Horowitz general partner Alex Rampell said that of all the tech giants that could make a major move in financial services,
While the anticipation for Amazon’s plunge into banking builds each year, it’s important to first understand Amazon’s existing strategy in financial services — what Amazon has launched and built, where the company is investing, and what recent products tell us about Amazon’s future ambitions.“Amazon is the most formidable. If Amazon can get you lower-debt payments or give you a bank account, you’ll buy more stuff on Amazon.”
Based on our findings, it’s hard to claim that Amazon is building the next-generation bank. But it’s clear that the company remains very focused on building financial services products that support its core strategic goal: increasing participation in the Amazon ecosystem.
As a result, the company has built and launched tools that aim to:
In parallel, Amazon has made several fintech investments, mostly focused on international markets (India and Mexico, among others), where partners can help serve Amazon’s core strategic goal.
- Increase the number of merchants on Amazon, and enable each merchant to sell more.
- Increase the number of customers on Amazon, and enable each customer to spend more.
- Reduce any buying/selling friction.
In aggregate, these product development and investment decisions reveal that Amazon isn’t building a traditional bank that serves everyone. Instead, Amazon has taken the core components of a modern banking experience and tweaked them to suit Amazon customers (both merchants and consumers).
In a sense, Amazon is building a bank for itself — and that may be an even more compelling development than the company launching a deposit-holding bank.
This report is a collection of everything we know about Amazon’s foray into banking, financial services, and fintech. We will be updating this brief on an ongoing basis as more relevant data, investments, news, and products are released.
Table of Contents:
2. Market strategy outside the US
3. Rumors: What will Amazon do next?
4. Closing thoughts
Product strategy: Amazon takes on financial services
Amazon is notorious for spreading its bets before going all in on a new product, and the financial services space is no exception. Through trial and error, the company has set up key financial pillars across payments, cash deposits, and lending. As we’ll explore below, all are related to Amazon’s broader growth and product strategies.
Amazon Payments
Amazon has aggressively invested in payments infrastructure and services over the last few years. That’s unsurprising, given that the payments experience is so close to Amazon’s core e-commerce business. Making payments more cash-efficient for Amazon and frictionless for customers is a key priority.
Today, Amazon Pay has evolved to include a digital wallet for customers and a payments network for both online and brick-and-mortar merchants. Since 2019, Amazon has invested in growing Amazon Pay’s marketplace, including forming a partnership with acquiring bank Worldpay.
While Amazon Pay is the company’s latest iteration on payments, Amazon has experimented with payments functionality for over a decade. Below is a timeline of some of the major Amazon Pay milestones:........MUCH MORE
*December 2018
Facebook Is Developing a Cryptocurrency for WhatsApp Transfers
I wonder what happened to Amazon Coin?
Going on five years ago Amazon introduced Amazon Coin to purchase apps for their Kindle. Here's the press release:
Introducing Amazon Coins: A New Virtual Currency for Kindle FireThere was a small flurry of excitement, Amazon was giving them away as a sort of "loyalty reward" and then.....nothing.
We had a couple posts on the AC:
February 2013
Amazon is Introducing "Amazon Coins" Virtual Currency (AMZN)
"Currency" may be stretching it at this moment but the potential is there.
May 2013
"Amazon Coins Expands to France, Italy, and Spain – Submit Now for Amazon Coins worth Millions of Euros" (AMZN)
That was the headline at Amazon's Developer page.
I was reminded of this story while reading about Scotland coin. As far as I can tell AmazonCoin is the perfect cryptocurrency for.....Amazon.
