Amazon.com Inc is planning to offer a credit card to US small business customers, furthering its push to supply companies with everything from reams of paper to factory parts, people with knowledge of the matter said.
The e-commerce giant has been in talks with banks, including JPMorgan Chase & Co, on a co-branded credit card for small business owners who shop on its Web site, said the people, who asked not to be named discussing private negotiations.
Seattle-based Amazon, the world’s largest online retailer, has been looking for a way to replicate in the workplace the success that has made it a go-to shopping destination for households.
In October last year, the company launched a Prime membership program offering fast free delivery for businesses, which was seen as a way to grab market share from factory equipment providers, such as W.W. Grainger Inc and Fastenal Co, and office supply stores, such as Staples Inc and Office Depot Inc.
Amazon is hoping the new credit card, which is to feature rewards points for purchases, will also let it eventually add offerings, such as business insurance, through a portal designed for its small business customers, one of the people said.
Amazon could use customers’ transaction data to help tailor the rewards, this person said.
The retailer has already lent US$3 billion to more than 20,000 small businesses that sell via its marketplace in the US, UK and Japan, Amazon said last year.
The battle for small businesses’ spending has also been heating up among US card issuers, such as JPMorgan and American Express Co. Over the past few years, those lenders have debuted retooled proprietary small business cards, as well as new co-branded offerings for such customers.
American Express last week said in a presentation that it is the top card issuer for US small businesses and that its portfolio is larger than its five nearest competitors combined.
The New York-based company does not disclose total purchase volume for the category.
In 2016, small businesses spent about US$72.9 billion per year on JPMorgan’s credit cards, US$46.7 billion on Capital One Financial Corp’s and US$15.6 billion on Citigroup Inc’s, the Nilson Report said in June last year.
Amazon already offers two credit cards for consumers with JPMorgan and Synchrony Financial. Those cards come with as much as 5 percent cash-back on purchases.
The retailer is also in talks with JPMorgan and Capital One about a product similar to a checking account that could help it lower the amount it spends on card fees every year.
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