Amazon made headlines last week with its acquisition of Whole Foods and the financial services industry should pay attention. Is Amazon going to try to buy Bank of America or Capital One next? Probably not. However, the mega retailer has been slowly creeping into the financial services industry, and making an impact in a variety of ways.

The first big splash came when Amazon created a unique way to spend credit card rewards points just like cash, directly on Amazon’s site. Instead of having to go to a dedicated website to redeem points for cash, gift cards or other retail products, Amazon partnered with credit card issuers to make paying for an order with earned credit card points a seamless process. The co-branded Amazon Prime Store card, which awards 5% cash back to Amazon Prime members and 3% back to non-Prime members, was also a game-changer, and a big competitor to Target’s Red Card.

What about consumers who rely mostly on cash? Well, Amazon came up with a solution for them, too. With Amazon Cash customers can load cash onto their Amazon account for future purchases. Similar to a checking account or debit card, customers just need to get their unique barcode from the Amazon app or website, present it to a cashier at any of the participating merchants, and add cash to their Amazon balance, all with no fees.

One of Amazon’s most recent contributions to the payments space came this month with the launch of Amazon Prime Reload. With this program, Amazon Prime members earn 2% rewards every time they reload their gift card balance with their checking account or debit card. The 2% reward is added to the gift card balance every time the customer reloads and is available for use within minutes. Amazon recognizes that not everyone will want to get the Amazon credit card, but by offering the chance to earn rewards in another way, they can continue to grow their Prime membership. With all those extra funds sitting around in someone’s Amazon account, it makes the process of buying online or through the app that much easier and frictionless.

What’s next for Amazon?

At this point, anything is possible. From lending to digital wallets to AI, Amazon’s growing presence in the global household is putting it in a strong position to be a reputable brand for financial products and services. And given its proven track record in creating innovative technologies, it has the capability to be first to market with the industry’s next great solution.

According to Mintel’s report Lifestage Marketing in Financial Services, more than any other generation, Millennials prefer to have all their accounts at a single institution rather than spreading them out among different ones. This not only illustrates the leverage that Amazon’s brand name will have with younger consumers, but also encourages financial institutions to continue to foster loyalty and create a stickier customer now before it’s too late.

Should banks be worried? Maybe a little. But more importantly, banks and FIs need to be thinking about what today’s pain points are when it comes to financial services because that is what Amazon would be likely to tackle next.

Lily Harder is the Vice President of Research for Mintel Comperemedia. Lily specializes in the financial services industry, researching and presenting on the latest industry trends, competitive intelligence insights and newsworthy developments.

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