Jeff Bezos Has Been Hanging Out With Jamie Dimon So Amazon Is Going To Be A Bank Now

And Warren Buffett is hanging out too, so this should get interesting.
Author:
Publish date:
Updated on

Do you think your business is safe from Jeff Bezos?

Dimon.Bezos.FatCats

Well guess what? Your business is not safe from Jeff Bezos.

It was just a little over a month ago when the health care industry was put back on notice that the Amazon threat was not in fact going away when, seemingly out of the clear blue sky, Bezos, Buffett, and Dimon announced they would be teaming up on a on a way to offer health care services to their employees.

The details on that are still sparse, but last week, in his interview with CNBC's Becky Quick, Buffett served notice that although "a miracle" isn't likely, the trio is aiming for something more than simply trimming healthcare costs by a few bucks.

"It isn't difficult to shave a little bit off here," he said, adding that "the question is whether we can come up with something better."

The answer to that "question" is almost unequivocally "yes" because i) it's Berkshire, JPMorgan and Amazon we're talking about here and more importantly, ii) it's hard to imagine what "worse" would be in the context of U.S. healthcare costs.

So yeah, Bezos is going to be in the health care business one way or another, just like he's now in the grocery business and on Monday morning we learn that he's looking to make inroads in the banking industry as well (this isn't a new notion, but it is a rather poignant reminder that Jeff is never sitting still).

As the Wall Street Journal reports, Jeff is now in talks with JPMorgan to create a checking account for Amazon customers.

What's particularly hilarious about this story is the extent to which the ubiquitous "people familiar with the matter" claim this "wouldn't involve Amazon becoming a bank" despite the fact that literally all of the other details they leaked seem to point to exactly that.

For instance, the sources said "the talks with financial firms are focused on creating a product that would appeal to younger customers and those without bank accounts." So Jeff wants to reach out to the unbanked and make them banked via an Amazon checking account. But remember, Amazon is not trying to be a bank.

Additionally, the people noted that "Amazon has been considering a bigger push into finance for years, looking to reduce the fees it pays banks and payments processors [and] providing Amazon customers with a checking account from which they could directly withdraw cash for purchases could help to reduce some of those fees." But again, Amazon is not trying to be a bank. They just want Amazon customers to be able to pay for shit out of an Amazon checking account so Jeff doesn't have to pay processing fees to banks.

And of course this would almost invariably be integrated with Amazon Pay which Bezos is already trying to push at brick-and-mortar retailers starting, of course, with Whole Foods, which he now owns.

Probably the best way to read the Journal's piece is to go ahead and assume that whatever it says Amazon won't do and/or whatever it claims is still "unclear", Amazon actually will do.

So, for instance, when the Journal says "it is too early to say exactly what the product will look like, including whether it would give customers the ability to write checks, directly pay bills, or access to a nationwide ATM network," you can go ahead and assume that Jeff is thinking about letting people do literally all of those things.

Sure, becoming a bank would require Bezos to jump through all manner of regulatory hoops and could, as the Journal mentions, constrain the company's ability to make acquisitions, but if you think Jeff can't figure out how to navigate that, then you might not have been paying attention over the past decade as the guy who you used to bully in the lunchroom made $120 billion and morphed into an extra from the set of an Expendables sequel.

The punchline to the whole article is this:

[Amazon's] more-than $700 billion market value eclipses the combined value of JPMorgan and Bank of America Corp , the two biggest U.S. banks.

And hell, at a net worth of $120 billion, Bezos could just start his own personal P2P lending arm if the whole First Bank Of Amazon idea doesn't work out.

Bottom line:

Related