June 13, 2021, 23:03

    Amazon’s plastic surgery

    Amazon’s plastic surgery

    Amazon.com (AMZN.O) is taking its branding muscle for a spin. The e-commerce giant is auditioning potential credit card partners to replace JPMorgan (JPM.N), Reuters reported on Wednesday read more . Dramatic shifts in plastic make it a good moment for Jeff Bezos’s firm to shop around, and for Jamie Dimon’s bank to let it.

    Credit cards are one of the most lucrative bits of consumer banking , typically yielding twice as much as regular loans. But slapping on a name like Amazon comes at a price, in the form of rewards and payments to brand owners. At Citigroup (C.N), revenue from third-party cards fell 26% in the first quarter, year-on-year. Interest income fell, but payments to partners went up. Credit card companies have seen consumers pay off balances at an unprecedented rate during Covid-19.

    That means specialist card firms like Synchrony Financial (SYF.N) and American Express (AXP.N) have even more need for new customers. And partners with name recognition can push for a bigger share of the pie. For the colossal JPMorgan, Amazon only represents around 1.5% of the overall loan book. This is a fight it can afford to sit out. (By John Foley)

    Sourse: reuters.com

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