Amazon Considering A Small-Biz Co-Branded Credit Card

Plans are underway for online retail giant Amazon to provide small-business customers a credit card. This is in efforts by the e-commerce giant to supply businesses with products that range from factory parts to stationery. According to sources Amazon is holding talks with financial institutions and this includes JPMorgan Chase with a view to launching a credit that is co-branded for its customers who are owners of small businesses.

The Seattle, Washington-based online retail giant has been seeking ways of replicating the success it has enjoyed with end consumers in the business-to-business market. Last year in October for instance Amazon unveiled a membership program with a view to providing fast and free delivery services for businesses. The Prime membership program for businesses was viewed as a threat by factory-equipment providers and office-supply stores.

Business insurance

Per sources Amazon’s strategy is to eventually add extra offerings like business insurance to the new co-branded card for small businesses. Amazon already runs a lending program for small businesses and so far approximately $3 billion has been lent to over 20,000 small businesses which sell on Amazon marketplaces in Japan, the United Kingdom and the United States.

The talks between Amazon and the banks come at a time when U.S. card issuers have heightened the competition amongst them for small business dollars. American Express has already stated that it is the leading card issuer among small businesses in the United States. Though American Express doesn’t reveal the exact amounts small businesses spent on its cards, the figure was $72.9 billion in 2016 for JPMorgan’s small-business credit cards.

Growing ad business

Amazon’s aggressive push into the small business market coincides with a leading Wall Street firm indicating that the shares of Seattle, Washington-based online retail giant are likely to appreciate following the company’s strong growth in the new markets it has set its foot in. Consequently Jefferies has reiterated a buy rating on the shares of Amazon. The Wall Street firm has also predicted that ad business sales of Amazon will surge in the next half a decade.

“We think advertising could become Amazon’s most profitable revenue stream and similar to AWS [Amazon Web Services] afford opportunities to invest back into the core biz. We forecast Amazon reaching $1 trillion in market cap by 2022,” wrote an analyst at Jefferies, Brent Thill, in a client note.

According to Thill the ad business of Amazon will see its sales increase by 43% annually to reach a figure of $22 billion by 2022. The most recent figure for Amazon’s ad sales is $4 billion.

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