If you thought Wal-Mart, Google or Amazon couldn’t get any
bigger, you would be wrong. Increasingly, companies are venturing into the
lucrative consumer and commercial banking business. For example, Wal-Mart
announced this week that the store will offer a prepaid credit and debit card
through American Express and will offer many of the traditional features of a
typical bank checking account. On the other spectrum, Google and Amazon have
begun offering businesses in the United Kingdom loans of up to $10,000 to use
on purchasing Google Adwords and expending lines of credit to small business
respectfully.
Dan O’Malley, founder
and CEO of PerkStreet Financial believes that the moves by the big technology
and retail giants are simply the result of the changing payments landscape.
O’Malley says, “Money has gone digital. The core unit of banking in our economy
is not paper. Companies that are digital are at a distinct advantage in the
current financial services ecosystem.” He continues, “Big banks continue to
cater to the wealthy and medium-sized banks continue to cling onto
bricks-and-mortar branches, and because of that, the average consumer is
looking for better options.”
However the moves by Wal-Mart, Google and Amazon are just
the beginning and require support from existing members in the financial services
market like American Express assisting Wal-Mart with its new line of financial
products. While no one is expecting these types of companies to start building
branches and converting into more traditional financial institutions in the
near future, it is a possibility over the long run due to the shifting consumer
preference for new payment options.
Read full story: http://www.usnews.com/news/articles/2012/10/10/google-walmart-going-after-banks-with-consumer-commercial-lending-programs