Wells Fargo and Amazon have teamed up to offer interest rate discounts for Prime members who have student loans with the bank. The big question is what the move may mean in the future.
Amazon's partnership with Wells Fargo was reported in many outlets as a way to dip a toe into the banking business. Prime members get a 0.50-percent interest rate discount from Wells Fargo. That discount can also be added to a 0.25-percent discount if a student enrolls in an automatic loan repayment plan.
On the surface, Amazon is merely courting students more for a $49-a-year Prime plan that's half the price of a regular one. Amazon isn't dumb. These students are likely to stay customers of the ecommerce giant for a long time.
So, should Amazon get more into banking? Probably not. But, when you think about it, Amazon may be able to get into multiple businesses including financial services.
Here's how: Amazon excels at customer service. It likely has capacity. Amazon is also using its compute capacity and data centers for Amazon Web Services. Why not customer service as a service?
For now, Wells Fargo and Amazon have a fancy affiliate marketing deal. Wells Fargo owns the customers. My bet: Amazon can easily get into the loan-servicing business via its Prime infrastructure.
Banking is a bit of a stretch, but loan servicing is possibly a natural extension.