Amazon's Focus On Fintech, Explained

Amazon.com, Inc. AMZN is a prime example of how "Big Tech" needs to incorporate fintech in its business, according to Cantor Fitzgerald.

The Analyst

Cantor Fitzgerald's Joseph Foresi, Michael Reid and Drew Kootman commented on Amazon's fintech ambitions.

The Thesis

Cantor Fitzgerald's team of researchers hosted a conference call with John Richards, Amazon's vice president from 2003 through 2016 and now owner of YourChoice Technologies. The main takeaway from the conversation is that Amazon's roots trace back to merely being an aggregator of products and delivery services. Over time, it evolved to become a technology behemoth and continues to expand into fintech areas so it can "do what the customer wants."

Amazon, for example, could dominate in the voice language payments and peer-to-peer transactions through Alexa and Amazon Pay, the analysts wrote. Beyond payment transaction, Amazon is showing a desire to enter into other financial and banking business ventures, including opening and holding bank accounts for clients.

The Benzinga Global Fintech Awards are a yearly showcase of the best and brightest in fintech. Grab a ticket to the May 15-16 event in New York City.

Amazon needs to not only build trust with customers in holding their money, but demonstrate their banking service is more convenient than traditional bank accounts, the analysts wrote. In terms of compliance, Amazon will likely follow all rules and regulations and keep on expanding its services.

Bottom line, Amazon already boasts the "most powerful real estate" platform in the world, so how far can Amazon expand into fintech? "As far as the customer wants."

Price Action

Shares of Amazon closed at $1,427. The stock is up 20 percent in 2018.

Related Links:

The Rise Of An Empire: All The Ways Amazon Grew Even Bigger Under Trump's Nose

From Mattresses To Groceries, Survey Shows Consumers Don't Always Prefer Amazon