The FT on Friday had an interesting piece on Amazon’s foray into banking (see http://on.ft.com/2t89A6L if you have access). It reckons that Amazon will be extending its lending to small businesses in the US, the UK, and Japan – focusing particularly on lending for working capital to sellers using its platform.
So here – in no particular order, are some points on this Amazon play:
- It seems similar to the PayPal/Ebay story – recall that PayPal started off as the way to buy stuff on Ebay
- It’s a global play – like Metro Bank, but unlike many other UK challenger banks (anyone remember Egg?)
- The data it has access to on its borrowers gives it a genuine source of competitive advantage, both in the initial offering and the monitoring – to say nothing of control if they look like defaulting
- It is going after a segment (small business banking) where there have been ongoing public policy concerns about a lack of effective competition
All in all, hard not to see it as good news all round.
gleedsaling 
Leave a Reply