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Technology / Cloud

Amazon battles banks with seller lending scheme

Amazon will offer business loans to small sellers in the UK and seven other countries starting later this year.

The lending scheme, which is currently available in the US and Japan, will now also be extended to Canada, China, France, Germany, India, Italy and Spain.

According to the report in Reuters, the service will be offered on an invite-only basis, not to all Amazon sellers.

Using its internal data to assess suitability, Amazon provides loans for three to six months of between $1000 and $600,000, which merchants can use to buy inventory for sale on the site. Amazon will make money from interest and the cut of the increased sales it takes.
The move into lending in China is a challenge to Chinese online seller Alibaba, which provides loans to small businesses.

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Anthony Duffy, director of retail banking in UK & Ireland at Fujitsu, commented: "Amazon‘s extension of its – by invitation only – business loan service is to be welcomed. It introduces new competition into a market that regulators have long-viewed as being short of innovation and alternative market options.

"While attention will be focused on how this offering will impact the established banks, it will be equally interesting to see how challenger banks respond. Much has been made of how these new entrants will change banking.

"Given Amazon’s name, size and existing lending experience, its approach may well set a benchmark to which other providers – both established and new – might aspire."

This article is from the CBROnline archive: some formatting and images may not be present.