How much does Amazon’s rumoured bank account threaten MasterCard and Visa?

Amazon is planning to provide a product similar to checking accounts to bypass MasterCard and Visa for purchases on its platform. Card issuers stand to lose wallet share, if Amazon can convince people to change payment behaviour and open checking accounts with them for Amazon purchases. The bank of choice will win by growing deposits. It would also mean that smaller ecommerce merchants will need to work harder to attract sales away from Amazon. This strategy doesn’t have to be limited to Amazon and their bank of choice. For example, Amex Shop Small is an attempt at community purchasing mentality with small businesses. However, Amex Shop Small does not help the small business on the fee front. If the new bank account feature is introduced, revenues could be pocketed by Amazon as additional profit, or passed through to merchants to reduce sales fees and payment costs.

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