The Big Tech In Fintech Report:
How Facebook, Apple, Google, & Amazon Are Battling For The $28.2T Market
1
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Contents
7
9
15
31
Key
Findings
Where Big Tech Is
Making Moves
Facebook
Apple
44
Google
60
Amazon
6
Key Findings
Overview of big tech* companies’ activities in financial services, 2020 – 2021 YTD (6/10/21)
Big tech funding to fintech companies dropped slightly
amid the pandemic as deal activity trended up.
•
Big tech investment in fintech companies reached
$2.2B in 2020, marking a 4% drop from the previous
year. In contrast, deal count increased 52% year-overyear (YoY), hitting 32 deals.
Notable themes:
•
Big tech companies are taking on the role of fintech
vendors through partnerships. Apple and Google are
already partnering with banks to embed banking into their
services, while Amazon is seeking out institutional lenders
to expand its loan offerings. These partnerships present a
win-win situation for tech giants and legacy names alike
and help boost customer attraction and retention.
•
But a focus on in-house offerings could threaten legacy
banks moving forward. Money management is becoming
increasingly intertwined with non-banking apps (e.g.,
social media, communication), giving tech giants more
incentive and leverage to keep financial offerings inhouse. In big tech’s race to become the go-to app for
banking, shopping, and connecting, legacy banks face the
threat of being further pushed out of the financial system.
Google is the most active tech giant focusing on fintech.
•
Google led big tech in unique fintech investments
(23) between 2020 and 2021 year-to-date (YTD),
followed by Amazon (7).
•
GV (Google Ventures) is the most active big tech
venture arm by a wide margin, participating in 45
fintech funding rounds between 2016 to 2021 YTD.
Note: “Big tech” includes Facebook, Apple, Google, and Amazon.
7
TECH GIANTS IN FINTECH
How big tech is transforming fintech
Product: WhatsApp launched P2P money transfers in India and Brazil to increase its market share in digital payments in
emerging markets.
Product: Facebook launched a “Shops” feature for Facebook and Instagram to further grow its e-commerce offering.
Partnership: The company’s rebranded crypto project, “Diem,” announced Silvergate Capital as the exclusive issuer of the
Diem US dollar stablecoin, which will be launched in 2021.
Product: Apple launched an Amazon Prime-like subscription service called Apple One, which bundles all of Apple’s digital
services. The launch signals Apple’s transition from hardware to software services.
Product: Apple introduced Apple Family Card to help families manage shared finances in a single app, including money
management services for parents, teens, and children.
Acquisition: Apple acquired payments startup Mobeewave to turn iPhones into mobile contactless payment terminals.
Product: Google revamped Google Pay and launched Google Plex, a mobile bank account integrated into Google Pay.
Partnership: Google partnered with Shopify to give its 1.7M merchants access to consumers on Google Search. The deal
strengthens Google Search’s position as the starting point for users’ shopping journeys.
Partnership: Google partnered with Western Union and Wise to offer international money transfer services in India and
Singapore. The $470B remittance market represents a significant revenue opportunity for Google.
Partnership: Amazon partnered with Marcus by Goldman Sachs to further scale its loan offerings to Amazon sellers in
the US.
Acquisition: Amazon acquired India-based fintech Perpule, which offers self-checkout, queue management, and
payments services for offline retail stores. The acquisition is line with Amazon’s strategy of gaining market share in
India’s growing digital payments space.
8
Where Big
Tech Is
Making
Moves
9
MARKET DRIVERS
What’s driving big tech activity in fintech?
Rise of embedded fintech
Growing investor interest
As APIs make it increasingly
easy to embed banking
services into any product,
companies across all
industries are taking steps to
add new revenue lines from
financial services.
Fintech companies raised a
record $22.8B in Q1’21, a 98%
jump quarter-over-quarter
(QoQ).
Opportunity to scale
Tech giants already have
incredible reach with their sheer
quantity of active users, which
can be leveraged to drive higher
adoption for their financial
services offerings.
Data network effect
Tech giants are sitting on
massive amounts of
consumer user data, which
can be analyzed to create
tailored financial products.
10
INVESTMENT TRENDS
How big tech has invested across fintech
Total disclosed fintech funding that involved participation from big tech venture arms
2016 – 2021 YTD*
Funding amount ($M)
Deal count
40
4500
32
30
3000
1500
0
20
21
14
13
10
10
$1,379
$477
$2,891
$2,253
$2,158
$1,297
2016
2017
2018
2019
2020
2021 YTD
*2021 YTD as of 6/10/2021.
20
0
11
INVESTMENT TRENDS
Google’s GV is the most active big tech venture
arm in fintech
Number of unique investments made by Google and Amazon’s venture arms, 2016 – 2021 YTD
10
Google
8
6
Gradient Ventures
capitalG
Google Ventures
Alphabet
Amazon
4
2
0
2016
2017
2018
2019
2020
2021 YTD
Note: Gradient Ventures, Google Ventures, and capitalG are venture arms of Google (Alphabet). Amazon’s deals include deals made by Amazon
Alexa Fund, its venture arm. Facebook and Apple do not have venture arm activity yet.
12
INVESTMENT TRENDS
Top big tech funding rounds (2016 — 2021*)
Company
Deal date //
Deal amount ($M)
Total disclosed
funding ($M)
Select investors
Description
Jan ’18 // $1,500M
$5.03B
KKR, BlackRock, Temasek, Google,
Samsung Ventures
Gojek is an Indonesia-based super-app that offers a variety of
services including transportation, logistics, payment, food
delivery.
Feb ’19 // $1,000M
$5.03B
Tencent Holdings, Google,
Mitsubishi Corporation
Gojek is an Indonesia-based super-app that offers a variety of
services including transportation, logistics, payment, food
delivery.
Apr ’20 // $600M
$2.6B
Google Ventures, Andreessen
Horowitz, General Catalyst,
Sequoia Capital
Stripe is an online payment processing platform that gives
online merchants the ability to securely accept credit card
payments through custom-built forms.
Feb’ 16 // $400M
$1.6B
Google Ventures, Founders Fund,
Khosla Ventures, Goldman Sachs
Oscar Health is a health insurance company that offers
personalized and digital insurance services.
May ’18 // $363M
$5.8B
Kleiner Perkins Caufield & Byers,
Sequoia Capital, DST Global,
capitalG
Robinhood allows users to invest in US stocks and ETFs
commission-free. It also offers Robinhood Gold, a paid service
for investors to access margin and extended hours trading.
*2021 YTD as of 6/10/2021.
13
INVESTMENT TRENDS
Top big tech acquisitions (2016 — 2021*)
Company
Deal date //
Deal amount ($M)
Total disclosed
funding ($M)
Acquirer
Description
Aug ’16 // $100M
$2M
Google
Orbitera’s Cloud Commerce Platform enables multi-channel
software delivery and commerce on cloud platforms.
Jul ‘20 // $100M
$26.5M
Apple
Mobeewave offers technology that allows phones to securely
receive payment transactions made with contactless cards and
wallets.
Aug ’18 // $45M
$23.3M
Amazon
Tapzo is a chat-based personal assistant app that aggregates
different apps in one place, including categories like cabs, food,
recharge, bill payment, news, horoscopes, and more.
Mar ’21 // $20.4M
$5.4M
Amazon
Perpule is an India-based self-checkout, queue management,
omnichannel engagement, and payments platform for offline
retail stores.
Feb ’19 // N/A
N/A
Facebook
Chainspace offers a smart contract development platform that
facilitates payments and other services through blockchain
technology.
*2021 YTD as of 6/10/2021.
14
Facebook
15
WHERE FACEBOOK IS FOCUSING
PAYMENTS
Facebook aims to
consolidate its payments
strategy across different
apps.
E-COMMERCE
CRYPTOCURRENCY
Facebook recommits to
building an e-commerce
empire.
Facebook scales back and
rebrands its cryptocurrency
initiative.
16
Theme 1: Facebook aims to consolidate
payments strategy across different apps
17
FACEBOOK IN FINTECH
…and forms a new division to oversee all
payments efforts
•
•
In August 2020, Facebook announced the formation
of a new team, Facebook Financial (F2), to build a
cohesive payments strategy across Facebook,
Instagram, WhatsApp, and Portal.
Facebook Financial (F2) will be run by David Marcus,
an executive who led Facebook's Messenger unit
before launching Facebook’s cryptocurrency project
Diem (previously Libra).
18
FACEBOOK IN FINTECH
WhatsApp starts P2P money transfer service
in India and Brazil
In May 2021, WhatsApp relaunched its P2P money transfer services in
Brazil, after it was blocked by the central bank nearly a year ago.
NUMBER OF WHATSAPP AND FACEBOOK USERS BY COUNTRY
400M WhatsApp users in India
120M WhatsApp users in Brazil
Facebook relaunches WhatsApp money
transfers in Brazil
May 4, 2021
Users can now send money through WhatsApp
in India’s massive digital payments market
Nov 6, 2020
Facebook plans to turn messaging app
WhatsApp into a money-making business
November 9, 2020
Source: eMarketer
19
FACEBOOK IN FINTECH
Payments currently make up less than 3% of
Facebook’s revenue
Payments and other fees currently comprise ~2.8%
of Facebook’s total revenue
$25.4B
$732M
Source: Statista, Facebook 10-K
20
Theme 2: Facebook recommits to building an
e-commerce empire
21
FACEBOOK IN FINTECH
….and launches Shops across Facebook and
Instagram
$30B
Facebook Shops’ estimated revenue
opportunity, per Deutsche Bank
Facebook and Instagram roll out Shops, turning
business profiles into storefronts
May 19, 2020
•
Facebook Rolls Out Shops to Businesses in the
UK and Canada
•
February 23, 2021
•
Shops allow retailers to easily upload their product catalogs and
begin selling through Facebook.
Customers can browse and buy products directly from a
business’ Facebook page or Instagram profile.
Customers can pay through Facebook Pay and carry their
payment credentials from one Facebook app to another.
22
FACEBOOK IN FINTECH
The growing ‘creator economy’ will be a big
leverage in Instagram’s e-commerce push
Instagram is home to 30M amateur creators
and 500K professional creators
Source: Instagram, Forbes
23
FACEBOOK IN FINTECH
Instagram aims to grow the creator class by
giving them more ways to make money
Badge Purchases on
Live Videos
Branded Content Tags
on Reels
Source: Instagram for Business
IGTV Ads
Customer Insights
from Reels
24
FACEBOOK IN FINTECH
Instagram is already the go-to app to connect
with brands
Instagram is the most popular app to follow brands
200M
90%
2 in 3
50%
Source: Marketing Charts, Instagram
Number of business
accounts on Instagram.
Of all Instagram users
follow a brand.
Say Instagram enables
interaction with brands.
Are more interested in a
brand when they see ads
for it on Instagram.
25
“We have a long way to go to build out a full-featured commerce
platform across our services, and this is a multiyear journey, but
I am very committed to getting there.
This modern commerce system is going to bring together a
number of areas where we either already have strong offerings,
like in ads, community tools, and messaging, with areas like
Shops, business messaging, and payments that we're focused on
ramping up now.”
Mark Zuckerberg, CEO, Facebook,
26
Source: Q1’21 Earnings Call
Theme 3: Facebook scales back and rebrands
its cryptocurrency initiative
27
FACEBOOK IN FINTECH
Libra to Diem: Facebook’s rebranded crypto
initiative is expected to launch in 2021
• Facebook announces the
launch of a new
cryptocurrency called
Libra, along with a digital
wallet subsidiary called
Calibra.
• Facebook
forms a new
team to explore
blockchain
opportunities.
2018
• Libra partners include
Visa, Stripe, PayPal, Uber,
eBay, and Mercado Pago.
June 2019
• PayPal, Visa, Stripe, Mastercard,
and Mercado Pago drop out of the
• Libra applies for a payment
Libra project.
system license from FINMA,
the Swiss Financial Markets
• Regulators question the project’s
Supervisory Authority.
potential risk for the global
financial system.
• Facebook rebrands its
cryptocurrency project to
• House lawmakers officially ask
Diem and changes the name
Facebook to put the Libra
of its digital wallet to Novi.
cryptocurrency project on hold.
October 2019
2020
• Diem abandons its Swiss
license application and
plans to move to the US.
• Diem partners with
crypto-friendly bank
Silvergate to issue a US
dollar-backed stablecoin.
2021
28
FACEBOOK IN FINTECH
Diem Fact Sheet
Diem Association: Current Members
• Diem (formerly Libra) is a permissioned blockchainbased payment system proposed by Facebook.
• The project, currency, and transactions will be
managed by the Switzerland-based Diem Association,
an independent organization with members from a
wide range of industries.
• The Diem Association plans to launch multiple
stablecoins backed one-to-one by different
government-backed currencies, as well as one multicurrency coin.
• The first coin, a single stablecoin pegged to the US
dollar, is expected to launch in a pilot program in the
2021. Silvergate Bank will be the exclusive issuer of
the Diem USD stablecoin.
Payments
Technology
Venture Capital*
Crypto
Telecom
Non-profit
29
KEY TAKEAWAYS & IMPLICATIONS
Facebook’s plans point to key trends for 2021
Theme
Takeaways
Rise of digital payments in emerging
markets
Social media apps turn into e-commerce
hubs
The crypto race of the future
Developing countries are becoming
Online shopping is becoming increasingly
While most tech giants have kept
increasingly cashless through quick
intertwined with social media, as users see
crypto at an arm’s length, Facebook
adoption of digital payments solutions,
social media platforms as a tool to connect
took the opposite approach with its
and they represent a huge revenue
and interact with brands.
Diem stablecoin project.
WhatsApp’s largest markets in terms of
Instagram already is the go-to social media
If Facebook’s Diem can overcome the
user base are India and Brazil, which will
app to connect with brands. By offering
regulatory hurdles and launch, the
give Facebook significant leverage in
more monetization tools to businesses,
company will have the first-mover
growing its payments/money transfer
Instagram will lure in more brands and
advantage in the crypto space.
user base in these countries.
shoppers to its e-commerce ecosystem.
opportunity for big tech’s payments
offerings.
Implications
30
Apple
31
WHERE APPLE IS FOCUSING
E-COMMERCE (SERVICE BUNDLING)
PAYMENTS
SHARED FINANCES
Apple is transitioning from
“hardware” to “software” by
bundling services across
entertainment, news,
payments, etc.
Apple acquires software
technology that enables
phone-to-phone
transactions.
Apple grows the scope of
its Apple Card business
and launches the Apple
Family Card.
32
Theme 1: Apple is transitioning from
‘hardware’ to ‘software & services’
33
APPLE IN FINTECH
Apple’s evolution into a service company
Select offerings included in Apple Services:
Launched on:
Apple Music
Apple TV+
iCloud
Apple Pay
Apple News+
Apple Books
Apple Arcade
App Store
Nov 1, 2019
Dec 20, 2020
Mar 25, 2019
Sep 19, 2019
Oct 30, 2020
Aug 20, 2020
34
APPLE IN FINTECH
Apple launches all-in-one subscription service
Apple One, similar to Amazon Prime
Apple’s new subscription bundle
In September 2020, Apple launched Apple One, a tiered
system of subscriptions that gives users access to a
range of Apple’s digital services, including Apple Music,
Apple TV+, Apple Arcade, Apple News+, Apple Fitness+,
and iCloud, for one monthly price.
Apple One takes a page out of Amazon Prime’s playbook
•
Apple One is a predictable step in Apple’s overall shift toward
recurring subscriptions.
•
Similar to Amazon Prime, Apple One bundles are designed to
encourage customers to subscribe to more Apple services, which
will generate more recurring revenue and boost customer loyalty.
Apple One vs Amazon Prime: Which
subscription deal offers better
value?
Apple One subscription bundle is
Mar 18, 2021 |
missing a key element: The iPhone
Sep 16, 2020 |
35
APPLE IN FINTECH
Apple Services revenue doubles in 2020 and
sets a new record in Q2’21
Apple doubled revenue from services in 2020
•
•
In 2017, Apple CEO Tim Cook set a goal to double Apple’s
2016 services* revenue by 2020.
In 2020, Apple hit that goal 6 months ahead of schedule,
and reported $13.16B in services revenue (about 22% of
the company’s total sales.)
Apple Services brought in record revenue in Q2’21
Apple reached
660M paid
subscribers across
its Services
portfolio
Note: Apple Services revenue includes revenue from iTunes, App Store, Apple Music, AppleCare, Apple Pay, iCloud, Apple TV+, Apple News+, and
Apple Card.
36
Theme 2: Apple may soon introduce phoneto-phone transactions
37
APPLE IN FINTECH
Apple acquires Mobeewave to turn iPhones into
mobile payment terminals
A NEW CONTACT-FREE PAYMENTS METHOD
•
Apple acquired Canada-based payments
startup Mobeewave for $100M in July 2020.
•
Mobeewave’s technology allows merchants to
use their smartphone as a payment terminal.
Customers pay by tapping their credit cards.
•
By incorporating Mobeewave’s features into
Apple Pay, Apple can offer quick payments and
transfers without any other app or platform.
38
Theme 3: Apple grows the scope of its Apple
Card business
39
APPLE IN FINTECH
Apple Card overcomes gender bias hurdles,
sees steady growth in user base
APPLE CARD MILESTONES, 2019 – 2021:
•
•
•
•
•
Sources: Forbes, Cornerstone Advisors
August 2019: Apple Card launches in partnership
with Goldman Sachs and Mastercard.
November 2019: Customers raise concerns over
gender bias in Apple Card’s algorithm.
March 2020: Apple Card users reach 3.1M.
March 2021: Investigation clears Goldman Sachs of
blame in the Apple Card gender bias case.
May 2021: Apple Card users reach 6.4M, 42% of
whom are women. Additionally, it is estimated that
80% of all new users in 2020 were women.
40
APPLE IN FINTECH
…and introduces Apple Family Card to help
families manage shared finances
Apple introduces Apple Card Family,
enabling people to share Apple Card and
build credit together
New Apple Card Family:
•
Apple Card Family allows 2 or more
people to co-own an Apple Card and
share and merge their credit lines.
•
Users can track purchases, manage
spending, and build credit together with
their Family Sharing group.
•
Parents can share Apple Card with their
children (ages 13 and up) and set
spending limits to teach safe and smart
financial habits.
April 20, 2021 |
Cleared of gender bias, Apple announces
Apple Card Family for spouses and teens
April 20, 2021 |
41
APPLE IN FINTECH
Apple Card has the potential to reach millions of
consumers across Apple’s ecosystem
Apple Card marketed
directly to millions
of iPhone users
Apple Card used
for payments online
and in stores
Daily Cash
injects liquidity
into Apple Pay
Apple Pay enables
commerce across
Apple’s ecosystem
42
KEY TAKEAWAYS & IMPLICATIONS
Apple’s plans point to key trends for 2021
Theme
Takeaways
Move from hardware to software
Kids banking sector grows
Contact-free payment alternatives
While Apple is unquestionably a
Challenger banks that target teens and
The Covid-19 pandemic underscored
hardware giant, the company is growing
children (e.g., Greenlight, Current) reached
the importance of contactless
its “services” portfolio, which includes
record valuations in 2021, bringing more
payment methods, especially for
entertainment, news, music, iCloud,
attention to this customer segment.
merchants with retail locations.
As Apple grows its banking product, its
Apple’s launch of Apple Card Family is a
Apple’s acquisition of Mobeewave
vast network of active devices and
direct attempt to capitalize on the growing
will help turn iPhones into contact-
services will be a critical lever in further
teen/children’s banking trend.
free mobile payment terminals,
payments, and more.
Implications
locking customers in the Apple
without requiring any additional
ecosystem.
hardware.
43
Google
44
WHERE GOOGLE IS FOCUSING
PAYMENTS
Google revamps its Google
Pay app and adds digital
banking offering.
REMITTANCES
E-COMMERCE
Google steps into the
remittance market
through partnerships.
Google wants to conquer
online shopping next.
45
Theme 1: Google revamps its Google Pay app
& adds digital banking offering
46
GOOGLE IN FINTECH
Google Pay gets a revamp, aims to be the
next all-in-one money app
150M+ monthly users
30 countries
Payments
• Peer-to-peer payments
• Payments to groups and businesses
• Transit and parking payments on
Google Maps
Personal Finance
Deals
Banking
* To be launched in 2021.
• Detailed saving and spending summaries
• Spending trends & insights
• Discounts and offers that can be
redeemed with one tap or automatically
applied in store or online.
• Digital bank account with trusted
financial institutions.*
47
GOOGLE IN FINTECH
Partnerships drive Google’s initiatives in digital
banking
Google Partners With Citi to Offer
Customers Checking Accounts
Nov 13, 2019 |
Google signs up six more partners for its
digital banking platform coming to Google
Pay
August 3, 2020 |
Google revamps Google Pay app, adds 11
bank partners
Nov 18, 2020 |
BBVA USA announces collaboration with
Google to offer digital bank accounts
August 3, 2020 |
48
GOOGLE IN FINTECH
Google’s strength lies in technology, data,
and merchant relationships
DATA & ANALYTICS
•
Google acquires an endless
amount of data through its
search engine and other
services.
USER EXPERIENCE
•
MERCHANT RELATIONSHIPS
BRAND RECOGNITION
•
Google’s brand recognition
gives it significant leverage to
boost customer acquisition
efforts.
Google provides an
optimized consumer-facing
front-end for its services.
•
Google already has strong
merchant relationships through
its Google for Retail service.
49
GOOGLE IN FINTECH
Google Plex: a mobile-first bank account
integrated into Google Pay
GOOGLE PLEX BUNDLES GOOGLE PAY FEATURES WITH BANKING
In 2021, Google Pay users will be able to open Google Plex bank
accounts on the app, supported by Google’s 11 bank partners.*
Google Plex accounts will be bundled with Google Pay features,
including:
•
•
•
•
•
•
No monthly & overdraft fees or minimum balance
requirements
Digital or physical debit card
AI-powered spending and savings insights
Money transfers, expense tracking, & bill splitting
Google Photos integration for receipts
Offers & reward programs with popular brands such as
Target, Etsy, Sweetgreen, and Warby Parker
Note: Google’s bank partners include Bank Mobile, BBVA, BMO Harris, Citi, Stanford Federal Credit Union, First Independence Bank, Seattle Bank,
The Harbor Bank of Maryland, Green Dot, SEFCU, and Coastal Community Bank.
50
GOOGLE IN FINTECH
Plex puts data privacy & security first
GOOGLE PLEX PRIVACY SETTINGS GIVE EVERYONE A CHANCE TO ‘OPT OUT’
Google Pay won’t use
individuals’ transaction
history to personalize
their app experience
unless explicitly granted
permission.
Google Pay alerts
users when they begin
a transaction with a
stranger (a person not
on their contact list).
Users will be able to test
run the personalization
feature for 3 months
before deciding whether
to activate it.
Google Pay won’t sell user data to third parties or share their
transaction history with the rest of Google for ad targeting.
51
Theme 2: Google steps into the remittance
market
52
GOOGLE IN FINTECH
Google enters the $470B remittance market via
partnerships with Wise and Western Union
Google Pay launches international
money transfers with Wise and Western
Union
GOOGLE ADDS INTERNATIONAL MONEY TRANSFER SERVICE
•
Google Pay users in the US can now send
money to Google Pay users in India and
Singapore.
•
All international money transfers will be
enabled through Google Pay’s new
integration with Western Union and Wise.
•
By the end of 2021, Google expects USbased users to send money to 200+
countries through Western Union and 80+
countries through Wise.
May 11, 2021 |
Google Pay now lets U.S. users send
money to India and Singapore
April 21, 2021 |
Source: The Keyword (Google Blog)
53
GOOGLE IN FINTECH
Google Pay captures significant market share
in India, sees opportunity in APAC
In February 2021, Google Pay processed 36.1% of all of India’s
transactions, coming second after Walmart-owned PhonePe
*
Google’s remittance services will be a key differentiator
in both India and the rest of APAC
•
Developing countries in the APAC region are becoming
increasingly cashless, and the region is one of the fastestgrowing payments markets.
•
Google’s remittance services, once expanded, will work as
a key differentiator in this region and boost Google Pay’s
customer attraction and retention.
•
With regional payment giants Alipay and Tencent facing
pressure from the Chinese government, there’s also a new
window of opportunity for Google to become the go-to
money app in this region.
UPI: Unified Payment Interface
Source: The Economic Times, The National Payments Corporation of India (NPCI)
54
Theme 3: Google wants to conquer online
shopping next
55
GOOGLE IN FINTECH
Google announces partnership with Shopify,
now directly competes with Amazon
KEY TAKEAWAYS FROM THE GOOGLE + SHOPIFY DEAL
•
The Google + Shopify integration will allow merchants to
more easily sign up to feature their products appear
across Google on Search, Maps, Images, Lens, and
YouTube.
•
The enhanced search and product listing capabilities will
help Google keep users on its services. Instead of using
Google’s search engine as a gateway to find other ecommerce platforms, customers will discover and
purchase products on Google’s network.
•
The deal is Google’s first big step in becoming an ecommerce powerhouse, putting the company in direct
competition with Amazon.
56
GOOGLE IN FINTECH
Google launches new e-commerce tools to
upgrade user experience for shoppers
Google’s Shopping Graph is an AI-enhanced tool that
brings together information from websites, prices,
reviews, videos, and product data to show users the
most relevant listings as they shop on Google.
Google’s new shopping feature allows users to find
products depicted in screenshots in Google Photos. The
“search inside the screenshot” option will prompt
Google Lens to analyze a photo and return search
results for the products it can identify.
57
GOOGLE IN FINTECH
Google is well-positioned to become the next
e-commerce giant
$0
1.7M
1B
3B
$147B
Source: The Verge, Shopify, Google
Google reintroduces free listings in
Google Shopping
Number of retailers Shopify brings to
Google’s network
Number of shopping searches Google
receives in a single day
Number of active Android devices
across the world in 2021
Google’s 2020 earnings from Google
ads
58
KEY TAKEAWAYS & IMPLICATIONS
Google’s plans point to key trends for 2021
Theme
Takeaways
Implications
Big tech vs. banking-as-a-service
Quest to become a one-stop-shop for
personal finance
Amazon’s next competitor
Instead of dealing with regulatory
The race to become the go-to finance
As online shopping becomes more
hurdles or reinventing the wheel, tech
super-app has sped up in the last few years,
pervasive, big tech companies are
giants are opting to partner with legacy
with more fintechs bunding banking,
taking steps to gain a bigger share of
financial institutions to embed banking
investing, retirement planning, and other
the e-commerce market.
services in their own interfaces.
relevant services under a single brand.
Google has partnered with 11 banks so
Google’s revamped Google Pay app will
Google Search may bring more
far to embed banking services into the
compete with personal finance fintechs by
merchants and shoppers to its
Google Pay app.
combining banking, P2P money transfers,
network, but that alone won’t be
payments, and budgeting in a single app.
enough for shoppers to “close” their
deals on Google.
59
Amazon
60
WHERE AMAZON IS FOCUSING
BANKING ECOSYSTEM
LENDING
Amazon is building a bank
for itself.
Amazon relies on business
lending to attract more
SMBs to its marketplace.
PAYMENTS & E-COMMERCE
(INDIA)
Amazon sets its sights on
India’s fintech industry.
61
Theme 1: Amazon is building a bank for itself
62
AMAZON IN FINTECH
Amazon offers a range of banking services
for its merchants and customers
Credit cards
Checking accounts (incl. prepaid cards)
Business credit cards
Line of credit/loans
Merchant services (incl. payment solutions)
Insurance
Note: Merchant services include payment solutions; checking accounts include prepaid cards.
63
AMAZON IN FINTECH
All the ways Amazon unbundles the bank
Note: Merchant services include payment solutions; checking accounts include prepaid cards.
64
AMAZON IN FINTECH
While Amazon does not intend to become a
‘public’ bank anytime soon…
AMAZON IS BUILDING THE NEXT-GENERATION BANK
ONLY FOR THE AMAZON ECOSYSTEM
•
Amazon remains very focused on building financial
services products that support its core strategic
goal: increasing participation in the Amazon
ecosystem.
•
As a result, the company has built and launched
tools that aim to:
1. Increase the number of merchants on Amazon and
enable each merchant to sell more.
2. Increase the number of customers on Amazon and
enable each customer to spend more.
3. Reduce any friction in buying and selling.
In a sense, Amazon is building a bank for itself by taking
core components of modern banking (deposits, credit
cards, loans, insurance) and tweaking them to suit
Amazon merchants and customers.
65
AMAZON IN FINTECH
…the threat of an ‘Amazon invasion’ in banking
is on the horizon
CHATTER ABOUT AMAZON IN THE BANKING SPACE IS INCREASING
Could Amazon start a bank? The FDIC has
opened the door.
Dec 18, 2020 |
Brace Yourself for the ‘Bank of Amazon’ (It’s
Coming … Someday)
May 20, 2021 |
Is Amazon Building The Next Generation
Bank?
News mentions of Amazon AND (banking, bank, lending, loan), 2016 – 2021 (5/27/2021)
Apr 30, 2021 |
66
Theme 2: Amazon relies on business lending
to attract more SMBs to its marketplace
67
AMAZON IN FINTECH
Amazon loans are designed with SMB needs
in mind…
AMAZON’S LENDING MODEL
Platform
E-commerce
Business
model
Interest-based
Capital usecase
Funding Amazon inventory
Repayment
method
Automatic monthly payments
Credit check
Not required
Source: CB Insights, Amazon Lending
AMAZON’S BUSINESS LENDING POTENTIAL IS STAGGERING:
$3.4T
Estimated value
for the global
SMB lending
market in 2022*
$5B
Total amount of
loans Amazon
issued to 20K+
SMBs*
68
AMAZON IN FINTECH
…resulting in a symbiotic relationship between
Amazon and its merchants
Loan offer to Amazon merchants
Inventory to be sold on Amazon
Automatic monthly principal & interest payments
Merchant credit data
69
AMAZON IN FINTECH
Amazon’s lending program grows through
bank partnership deals
• Amazon launched
Amazon Lending to help
SMBs finance inventory
on Amazon.
• Amazon uses private
algorithms and sales
data to evaluate loan
applications.
2011
• Amazon partnered with Bank
of America Merrill Lynch to
issue loans on an invitationonly basis.
• Loans range from $1,000 to
$750,000.
2018
• In July, Amazon partnered with ING
in Germany to provide loans to SMB
sellers. Loans range from EUR
10,000 and 750,000 with periods of
up to 3 years.
• In June, Amazon partnered with
Goldman Sachs’ Marcus to issue
loans up to $1M to US-based SMBs.
2020
70
AMAZON IN FINTECH
Amazon’s partnership with Marcus is likely to
set off a flywheel effect
AMAZON-GOLDMAN SACHS
MARCUS DEAL
•
•
•
In June 2020, Amazon partnered
with Marcus by Goldman Sachs
to offer digital lines of credit to
Amazon sellers in the US.
The Marcus Business Line of
Credit will offer loans up to $1M
with a fixed interest rate of 6.99%
to 20.99%.
If sellers consent, Goldman will
use data from its business
revenue and tenure on Amazon
to determine loan approvals.
WHAT’S IN IT FOR MARCUS?
WHAT MIGHT BE NEXT?
•
Goldman Sachs expands its
partnership ecosystem and
banking-as-a-service offering.
•
•
The deal will accelerate
Goldman Sachs’ recent push
into consumer banking.
•
•
Marcus will be the first lender
to make underwriting decisions
for the sellers on Amazon’s
platform.
•
Goldman Sachs can leverage
Amazon data to improve its
lending models.
•
•
Amazon signs more bank
partnership deals, once
Marcus proves profitability.
Amazon reports fee-driven
revenue jump from new
credit lines.
Amazon launches a
marketplace for loans.
Amazon evolves into a onestop shop for SMB
finances.
71
AMAZON IN FINTECH
It just became easier for Amazon to become a
lender, officially
NEW REGULATIONS EASE PATH FOR COMMERCIAL
COMPANIES TO BECOME LENDERS
NON-BANKS CAN NOW OPERATE AS BANKS
WITHOUT FEDERAL RESERVE OVERSIGHT
FDIC Eases Path for Amazon and Facebook
to Become Lenders
FDIC releases final rule on controversial ILC
charters
The Federal Deposit Insurance Corp. on
Tuesday approved a final rule governing socalled industrial loan companies that will
allow major businesses to seek banking
charters while escaping capital and liquidity
demands faced by dedicated financial firms.
The FDIC issued a final rule Tuesday regarding
industrial loan company (ILC) charters, a move
ILC opponents argue eases the path for
commercial companies to operate as banks
without Federal Reserve oversight.
Dec 16, 2020 |
Dec 15, 2020 |
72
Theme 3: Amazon sets its sights on India’s
fintech industry
73
AMAZON IN FINTECH
Amazon’s fintech and M&A investments are
concentrated in India
Amazon’s disclosed fintech investments and acquisitions, 2008 – 2021 YTD (6/2/2021)
INVESTMENTS
ACQUISITIONS
INDIA
U.S.
74
AMAZON IN FINTECH
Amazon identifies fintech opportunities in
India’s economy
India’s insurance
penetration was
estimated to be just
3.76% in 2020.
India has a largely cashbased economy where
~190M adults do not have
a bank account.
•
•
Amazon enters
India’s fintech
market with its
Amazon Pay ewallet.
2016
•
Amazon launched its Doorstep
feature, which allows
customers to add funds to
their Amazon Pay wallets
through a cash pickup service.
Amazon partners with ICICI
Bank to issue credit cards.
2018
Amazon becomes a
part of India’s
government-backed
payments network.
•
Amazon launches P2P
payments within the
Amazon Pay UPI* for
Android customers.
2019
* UPI is an instant real-time payment system developed by National Payments Corporation of India.
•
Amazon partnered with Acko
Insurance to offer auto
insurance on Amazon Pay in
India.
•
Amazon Pay launched a
digital gold investment
service that allows users to
buy gold for as little as Rs 5.
2020
75
AMAZON IN FINTECH
Amazon is determined to make Amazon Pay
the go-to payment method of India
AMAZON’S NUMBERS IN INDIA
$135B
Estimated value of India’s digital
payments market by 2023*
$250M
100M
10M
5M
Amazon’s venture fund targeting
SMBs in India
Number of registered Amazon
users in India
Number of Amazon Prime
subscribers in India
Number of registered Amazon
Pay merchants in India
Source: ASSOCHAM & PwC*, NPCI
76
KEY TAKEAWAYS & IMPLICATIONS
Amazon’s plans point to key trends for 2021
Theme
Takeaways
India’s digital payments boom
Big tech vs. banking-as-a-service
Contact-free payment alternatives
India’s push to bring in and diversify
Instead of dealing with regulatory hurdles
The Covid-19 pandemic underscored
online payment methods created a digital
(or reinventing the wheel), tech giants are
the importance of contactless
payments boom in the nation, luring
opting to partner with legacy financial
payment methods, especially for
several tech giants to the region.
institutions to embed banking services to
merchants with retail locations.
their own interfaces.
Implications
Like Facebook, Amazon is looking to
In addition to offering an in-house loan
Amazon’s most recent contactless
capture a share of India’s digital
program, Amazon also partners with legacy
payment technology, Amazon One, is
payments market. The company already
institutions to scale its SMB loan offerings.
being tested out in Whole Foods
has 100M registered users in India, which
The partnership will help Amazon transfer
locations. Also offered to merchants
can be leveraged to drive the adoption of
risk while increasing the lending capacity
as a service, Amazon One has the
Amazon Pay among merchants.
within its merchant ecosystem.
potential to significantly reduce the
use of physical credit & debit cards.
77