Amazon Launching Credit Card for SMBs

In a move to maintain their spot as one of the largest online product and service suppliers in the world, Amazon are putting plans in place to launch a credit card for its small business customers.

After launching a prime membership programme which fulfilled fast and free delivery on orders placed by small businesses and business users last October, Amazon are said to be currently holding talks with several banks including the likes of JPMorgan Chase & Co. and American Express in order to produce a co-branded credit card. Whilst negotiations are being kept confidential until a final agreement has been made, the card is also rumored to feature a reward point scheme which will lead to further discounts for businesses upon regular use.

Giving Credit

The planned credit card for small businesses won’t be Amazon’s first foray into the financial arena. The e-commerce giant already offers two credit card plans for consumers in joint partnership with JPMorgan and Capital One to consumers based in the US. The cards offer in the range of 5% cashback on purchases, often making them an attractive prospect for those who shop with Amazon regularly. The intention of Amazon’s push towards helping finance small business users won’t come as good news to credit card firm AmEx however, who are regarded as the top card issuer for US based small businesses and immediately saw their shares slip by 1.4% by close of trading last Monday.

End of One Off Purchases?

The transition from one off purchases to regular credit accounts for businesses and consumers who purchase from retailers both online and offline has been a rapid one. Popular online payment firm PayPal were the first to launch a credit card with the added benefit of cashback on purchases made through their platform last year in August which was produced in partnership with Synchrony Financial. Similarly, established coffee brand Starbucks teamed with JPMorgan and Vista to create a credit scheme for its regular customers in renewed efforts to improve overall sales in the US after experiencing a recent slowdown in their growth. Examples like these could be just one of the reasons for Amazon’s new push on attempting to improve customer retention rates through credit accounts over non-financially backed schemes such as store and reward cards.

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Sam Rose