What’s the Fuss? Amazon Already Offers Full Suite of Banking Services

Amazon made headlines around the banking/fintech world this week following a WSJ story Monday about a rumored collaboration with Chase Bank and/or Capital One. The click-bait title, Next Up for Amazon: Checking Accounts (apparently revised from the title embedded in the hyperlink, “Are You Ready for an Amazon-branded Checking”) made it go viral in the United States, at least with news organizations.

The facts were less exciting than the headline. Apparently the ecommerce giant issued an RFP last year seeking suppliers of a “hybrid” checking account aimed at younger and unbanked customers (it’s unclear whether that is a single segment “young and underbanked” or two segments, “young” and/or “underbanked”). And there was no indication that any new product was coming now, or ever.

There is one thing missing in the 100+ stories that appeared in the wake of the WSJ piece:

Amazon already is a bank in everything but the name

Here’s a list of its current financial and payment offerings:

  • Amazon Pay: Used by 33 million to pay for goods at non-Amazon sites
  • Amazon Gift Cards: Available at brick & mortar retailers all over the country (I’ve bought more of those than all other gift cards combined)
  • Amazon Store Card, with financing option on qualified purchases: Issued by Synchrony Bank
  • Amazon Cash, a virtual debit card which allows cash deposits to the Amazon Pay wallet
  • Amazon Rewards Visa Signature Card, an affinity card issued by Chase Bank (also Amazon Prime Rewards card; see also March 13 update below)
  • Amazon Prime Reload, which pays a 2% bonus for cash deposits into Amazon Pay
  • Amazon.com Corporate Credit Line: A way for businesses to pay for Amazon purchases via monthly consolidated billing, underwritten by Synchrony Bank
  • Amazon Lending: Which has originated $3B to smaller merchants since 2011 (cited by Bloomberg, sourced to CB Insights)
  • Credit Card Marketplace: Hadn’t seen that before, includes Amazon co-branded cards along with Discover and American Express
  • Gift Card marketplace: Hundreds of prepaid gift cards from other retailers along with restaurants, travel, and entertainment providers
  • Amazon Currency Converter: For purchasing on Amazon.com in local currency
  • Amazon Allowance: Tool for parents to enable their kids to pay directly (link was broken so not sure the status)
  • Shop with Points: A number of major banking rewards programs can shop directly at Amazon with their bank-provided points including Citibank, American Express, Chase and Discover
  • Alexa: Supports banking and payments info (aka skills) from a number of financial institutions including Capital One, US Bank, and American Express

The only major retail banking service missing, a stand-alone debit card (although you can already link a debit card to your Amazon account). Which I’m guessing is the core of the RFP mentioned by the Wall Street Journal.

Update (13 Mar 2018): Bloomberg reports that Amazon is planning on launching a small business co-branded card with Chase, the issuer of Amazon’s consumer card.

Bottom line: Amazon is already deeply involved in banking and payments, as are most major retailers. Gift cards, co-branded credit cards, and SMB credit products are already being used by millions of consumers. Adding a debit card and/or “hybrid checking account” isn’t going to make them any more menacing as a competitor. The prime concern for banks is whether Amazon can move payment volume from bank-issued credit cards, where the industry enjoys healthy profit margins, to debit/ACH with narrow-to-non-existent margins.

Author: Jim Bruene (@netbanker) is Founder & Advisor at Finovate as well as Principal of BUX Certified, a financial services user-experience accreditation program. 


FinDEVr APIntelligence

Our first developers conference in the U.K. is just over a month away. Join us for two days of developer-focused presentations, demonstrations, and conversations at FinDEVr 2017 London, June 12 and 13. Stop by our registration page today and save your spot.

On FinDEVr.com

  • Trulioo Bolsters Regtech Solution with Mitek Partnership

Alumni updates

  • Trulioo Bolsters Regtech Solution with Mitek Partnership
  • Greenkey Technologies announces interconnection partnership with iMarket.
  • FinDEVr alum OutSystems expands to Asia with new office in Japan.
  • Ohio-based First National Bank of Pandora chooses core account processing platform from Fiserv.
  • Xero announces new partnership with Capital One to give SMEs more control over their data.

Stay current on daily news from the fintech developer community! Follow FinDEVr on Twitter.

Finovate Alumni News

On Finovate.com

  • KPMG Acquires Fintech Collaboration Specialist, Matchi.

Around the web

  • Misys introduces cloud-based, retail banking platform for German market.
  • Xero announces new partnership with Capital One to give SMEs more control over their data.
  • Zopa wins full FCA authorization for P2P lending.
  • Ohio-based Apple Creek Bank chooses core account processing and back office solutions from Fiserv.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

FinDEVr APIntelligence

FDNY17-Logo-RevFinDEVr New York will be here in less than one week! Check out company features and take a look at the previews from upcoming presentations. And of course, don’t forget to register today to save!

On FinDEVr.com

Alumni updates

  • Citi introduces new mobile passcode solution for its Treasury and Trade clients. See Citi at FinDEVr New York next week.
  • Putnam-Greene Financial Corporation to deploy core banking technology from Fiserv. Join Fiserv in New York next week for FinDEVr New York.
  • Capital One Financial Corporation appoints Amy Lenander as UK CEO.
  • Barclaycard adds free Uber ride as reward for loyal cardholders. See Barclaycard next week at FinDEVr New York.
  • OutsideIQ partners with SAP Ariba to help corporations quickly screen vendors for risk and regulatory compliance.
  • FinDEVr alum Capital One joins the chatbot revolution with its new SMS virtual assistant, Eno.
  • Currencycloud Collects $25 Million in New Funding.
  • BBVA Compass unveils BBVA Momentum, a seven-month accelerator for socially-minded entrepreneurs.
  • Kabbage nabs $500M for small business loans.
  • Fidor partners with Van Lanschot to create the first PSD2-inspired Payment Avenue.
  • MX to power digital money management tools for Travis CU.

Stay current on daily news from the fintech developer community! Follow FinDEVr on Twitter.

Finovate Alumni News

On FinDEVr.com

On Finovate.com

  • Finovate Debuts: ICAR Builds a Digital Identify Profile for Client ID Verification.
  • Spring Forward: FinovateSpring 2016 Alums Top $200 Million in Funding.
  • How Virtual Reality, Big Data, and the Blockchain Are Changing Proptech.

Around the web

  • eWise partners with TSWG to drive digital banking innovation.
  • OutsideIQ partners with SAP Ariba to help corporations quickly screen vendors for risk and regulatory compliance.
  • Featurespace to provide machine learning fraud and risk management solution to CashFlows.
  • Financial Times: Misys close to deal to combine with rival DH Corp.
  • National Bank of Abu Dhabi (NBAD) Egypt launches internet banking courtesy of CR2’s BankWorld Internet platform.
  • FinDEVr alum Capital One joins the chatbot revolution with its new SMS virtual assistant, Eno.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Mobile UX: A First Look at “Second Look” Transaction Alerts from Capital One


A paradox of the early digital banking era (1995 to 2007) was: Why is Capital One a laggard? The new company (spun out from Signet Bank in 1994) was widely revered as a data-analytics and marketing master. But it was practically a digital no-show for more than a decade, offering just a minimum level of functionality online. As recently as 2010, Capital One was the last major bank to launch a native mobile banking app.

Fast-forward six years. Capital One owns the innovation mantle, at least in the United States. It has Capital One Labs; it runs an innovation center in the Bay Area; and it now offers the most advanced set of mobile apps in the card-issuing business.

Its latest innovation? The first proactive service from a major issuer that alerts cardholders to deviations in spending with recurring charges. It’s called Second Look, and it certainly deserves one.

I was introduced to the new feature this week when I received a notification on my iPhone alerting me to a spending increase on my power bill (screenshot 1 below). After swiping through it and logging in via TouchID, the app displayed a chart showing how much my bill had increased last month (screenshot 2). And I was asked whether I was OK with the charge or not (bottom of screenshot 2). If not, the bank provided instructions on how to dispute the charge (screenshot 3). Customers can also elect to receive the alerts through email.

Another thing I really appreciated: The bank gave me enough info in the notification to make an intelligent decision whether I even needed to log in. The bane of the mobile-user experience is dealing with (ultimately ignoring) all the false positives you get through most notification services. I clicked through the notice out of curiosity. But thanks to the detail, I already knew that the $14 increase wasn’t a major problem.

Bottom line: This is just one example of a more proactive approach to helping customers deal with day-to-day finances. It’s still a relatively manual user experience, especially if you want to dispute a charge. However, as banks layer AI on top of their data hordes, outside APIs, and location-based info, we’ll see much, much more. Kudos to Capital One for leading the way.

(1) Second Look notification from Capital One
Exhibit 1: “Second Look” notification from Capital One


Exhibit 2: Second Look transaction analysis
Exhibit 2: Second Look’s transaction analysis


Exhibit 3: Second Look's taking action screen
Exhibit 3: The manual process to dispute a Second Look-flagged charge







Email Marketing: Third-Party Offers with Deal-Killer Fine Print

I’ve complained about similar offers before, but since this arrived in my inbox this morning, I figured it’s time to revisit the issue.


Today’s lesson is about third-party offers, where an outside company pays to get in front of your customer base. They are relatively rare in financial services these days because banks and card issuers are wary of being tarred and feathered in social media (or the CFPB) if something goes wrong or the particular marketing permissions were later shown to be lacking.

Uber offer from Capital One via email 3 Oct 2016
Uber offer from Capital One via email 3 Oct 2016


The offer in question is from Uber. It’s good for $5 off your first 5 rides and requires a Capital One card for payment. That’s a win-win. Uber gets a new customer and Capital One gets its card loaded into the Uber app for years to come.

The problem: It’s only for new Uber customers. I presume Capital One removes cardholders from the mailing who have charged an Uber to its card. But that doesn’t catch people who use another card in their Uber account.

So let’s break down what happens next. Capital One customers get this slick email (see above). They get excited to switch Uber payments over to their Capital One card to grab some $5-off rides. But then, after reading the fine print, or more likely clicking through the message and trying to sign up, cardholders find out they get zip from this deal. Now, they are not happy with Capital One or Uber. What a waste of time and brand loyalty.

Instead, why not give some smaller benefit to existing Uber customers willing to switch their payment card over to Capital One? Even just one $5 off coupon would suffice for most.

Bottom line: Capital One needs to earmark a portion of its commissions from Uber towards existing customers. If there isn’t enough revenue to do that, then it should stop making the offer.


Related: At last mfindevr-sv16onth’s Finovate Fall, MX demo’d, and won Best of Show, for an automated solution called Power Switch to automatically enroll your customers’ cards into e-commerce sites such as Uber, Amazon, iTunes, and so on. Get a behind-the-scenes look at how MX produces its award-winning (six consecutive Best of Shows) at FinDEVr in Santa Clara 18/19 Oct 2016 (register here).

Mobile UI: Capital One Wallet Reverts to Old-School Navigation

hamburger-menuI am not a huge fan of the hamburger navigation menu. If you are a smartphone native, I’m sure your eyes go right to the little pack of horizontal lines in the corner. But if you got your first smartphone in your 40s, you probably could use a little more help.

So I applaud Capital One, recently named in Fast Company as one of the best-designed mobile apps (see note 1), which in a 7 September iOS update ditched the so-called hamburger menu for something that’s actually visible on the page. See Fig 1 before and Fig. 2 after. I also learned today that Key Bank made the same decision to ditch the burger, but instead of a lower nav bar, they went with the more web-centric look of a near-the-top nav (Fig 3).
(Update 29 Sep: A reader informed me many banks are ditching the hamburger menu in light of Apple’s design advice here, here and here.)

Capital One Wallet iOS Previous
Fig 1. Capital One Wallet iOS


Capital One Wallet iOS Current
Fig 2. Capital One Wallet iOS

Unless you are Facebook, Instagram, or other apps where customers spend hours every week, you need to make it easy for infrequent users to find their way through your app. And even though mobile banking is relatively simple, many providers make it needlessly hard to navigate with cute, hidden menus.

I understand why designers minimize the navigation, mobile real estate is precious, and even a half-centimeter devoted to on-screen navigation is a lot. But what’s more important, showing more transactions on the main screen or how to actually do something meaningful?

The update also included a new restaurant finder to identify popular eating establishments based on transaction data across all Capital One cardholders (Fig 4). It’s reminiscent of the Citigroup/Microsoft/Morningstar joint venture Bundle (F10), which, not coincidentally, was acquired by Capital One four years ago.

Key Bank iOS app with top navigation
Fig 3. Key Bank iOS app with top navigation


Fig 4. Restaurant Finder in Capital One Wallet (iOS)


1. Only two financial companies were named in Fast Company’s list of 100+ best-designed products or apps in the October issue. The other was RobinHood, the simple, mobile stock-trading app.

Solving the False Positive Problem in Credit/Debit Authorizations

seattle_laFor the third year in a row, I traveled from Seattle to the L.A.-area to drop off my son at college. And for the third year in a row, Bank of America declined my card at Target, buying groceries and incidentals for him. And this time it was an EMV chip-card. Thank goodness I had my trusty Capital One card along, because it seems to do a far better job minimizing false positives (for fraud), at least for my account.

Capital One did have its concerns along the way, though. They sent the following email asking for confirmation that these gas-station authorizations were mine. And even though I didn’t respond right away, perhaps 12 to 18 hours later, they never shut off my card.


Bank of America also sent a similar email, but it arrived AFTER the card was declined. I understand the bank’s need to terminate suspicious transactions, but is it really that suspicious? For three years running, I’ve shown up in Los Angeles the last week of August (along with visits in between) and gone on a bit of a spending spree to stock my son’s dorm and now apartment (you’re welcome, boys!). Furthermore, I had already used the card to book an L.A. hotel, make some low-level but consistent charges along the way, coffee at Seatac, lunch in West L.A., and so on. But when I try to buy $150 in groceries at Ralph’s or Target, the card is declined, and worse, completely shut off from further purchasing.

Bottom line: My point here isn’t to complain about one issuer’s fraud-handling (although it felt good to get that off my chest), but to implore once again for more integration with smartphones to reduce false negatives. Specifically:

  1. Talk to me on the most immediate channel. Both banks sent emails, but I’m on the road, not checking emails. Pop a notification on the screen and send me a text message. Also, in instances of two account holders, make sure fraud alerts go to both (BofA emailed only my wife).
  2. Know me better. I get that Target in Tustin is outside my normal spending bubble. But I have a history of making charges in that area for 2+ years, so cut me a little slack.
  3. Better yet, know where I am. How many hundreds of millions could BofA save by tracking cardholder whereabouts in the background? I let Starbucks, Google, Yelp, and so on track my location. The benefits of them knowing where I am outweigh the privacy risks. The same goes for my bank.


iContactHeaderFFNote: Looking forward to seeing everyone at Finovate this coming week. Let me know if there is anything you want to discuss (jim@finovate.com).