Amazon lending boosts sales, moves in on bank territory
E-commerce giant continues to disrupt, ramping up small loans to sellers on its marketplace
Vice president for Amazon Marketplace Peeyush Nahar said on Wednesday that the company has stepped up lending to third-party sellers, shelling out US$1 billion in small loans over the past year.
The credit model is similar to what transaction processing companies PayPal and Square offer, using data from customers to identify credit worthy clients. Lending to merchants in turn helps them to grow.
“We give them access to capital when others don’t because we get their business model when maybe others don’t,” Nahar was quoted by Bloomberg as saying.
Amazon’s plans to expand its lending in the US, UK and Japan also are a sign of shifting power away from brick-and-mortar banks that historically dominated the small-business lending world.
The Financial Times quoted Nahar as saying that Amazon may offer even more bank-like services moving forward. “We started when we heard that capital was a big constraint for sellers. We’ll have to see what else is constraining them,” he said.