Tuesday, July 21, 2020

"Everything You Need To Know About What Amazon Is Doing In Financial Services"

Not quite everything. I'm still wondering what happened to "Amazon Coin."*
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,
“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.”
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.
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:
  1. Increase the number of merchants on Amazon, and enable each merchant to sell more.
  2. Increase the number of customers on Amazon, and enable each customer to spend more.
  3. Reduce any buying/selling friction.
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.
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:

  1. Amazon’s product strategy
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:....
*December 2018
Facebook Is Developing a Cryptocurrency for WhatsApp Transfers
I wonder what happened to Amazon Coin?
See, for example 2017's "Whatever Happened to Amazon Coin? (AMZN)"
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 Fire
There 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.