Big banks have suffered yet another blow in a war they’re gradually losing to online banking and bank-like services. Amazon Wallet — from Amazon (AMZN) — was quietly unveiled last week, giving consumers another choice for handling their money that isn’t a bank.
While the current “beta” version of Amazon Wallet isn’t packed with features and is therefore not a reason any investor needs to run out and immediately dump all their bank stocks, it’s still another piece of evidence that big banks are going to have to either adapt or die.
The thing is, big banks have been adapting, and not just because Amazon Wallet has been on the radar for a while. The question is, is this adaptation too little, and too late, for big banks and the corresponding bank stocks?
Amazon Wallet is Just a Microcosm
Some investors may already be familiar with Amazon Wallet, but for those who aren’t, it’s a little lackluster. As of right now, the mobile wallet app only stores gift card information and loyalty/membership card information. Though the app is eligible for use at about 70 eateries and retailers, it’s not exactly a threat to big banks.
Of course, the current version of Amazon Wallet is hardly the end product. Amazon has made it relatively clear for a while now that it’s aiming to become a lucrative hub for sending and receiving money. The latest step to that end (aside from the debut of Amazon Wallet) was last year’s launch of a service allowing Amazon customers to make payments to vendors with nothing more than an Amazon login and password.
It’s a territory that was previously dominated by banks and credit card companies, facilitating check and credit card payments. Amazon Wallet is hardly the only such service big banks and shareholders of bank stocks should keep a close eye on, however.
Google (GOOG) and Apple (AAPL) have both ventured into waters that would negate the need for a traditional bank. So have Walmart (WMT) and the still-struggling Isis effort. You could even put Green Dot (GDOT) into that group. And if you wanted to get technical about it, payday lenders such as First Cash Financial Services (FCFS) or EZCORP (EZPW) also allow consumers to manage their money without going through a bank.
Point being, Amazon Wallet isn’t an oddity; big banks are being threatened one way or another from all directions. That’s why they’re finally changing … or are they?