Three years ago, Amazon started lending thousands of dollars at a time to some of its best marketplace sellers. There was no press release or public announcement, just invitations for select small businesses to get capital to sell more stuff on Amazon.
While Amazon still isn’t talking publicly about the program, it has recently made a splashy hire to expand the initiative: Visa’s North America credit card boss Nick Talwar. According to Talwar’s LinkedIn page, he recently joined Amazon as general manager of Amazon Lending, “leading Amazon’s global expansion into the lending industry.” Prior to Visa, Talwar worked at peer-to-peer lending service Prosper and ran Citibank’s consumer banking business in Sweden.
An Amazon spokesman declined to comment.
The big-time hire suggests Amazon has lofty ambitions for its young lending business. Amazon Lending, which, according to a job posting, only currently operates in the U.S. and Japan, is aimed at providing Amazon sellers with quick access to capital at rates that are normally cheaper than most credit card interest rates. Repayment is automatically deducted from sellers’ Amazon accounts each month.
Amazon’s lending business has focused on business loans up to now. But Talwar’s consumer background at least raises the question of whether Amazon is considering lending to individuals as well.
Alternative lending programs like Amazon’s have become more popular in recent years as some banks have clamped down on loans to small businesses in the wake of last decade’s recession. Amazon, like PayPal and Square, can analyze a seller’s transaction velocity and volume on its platform to help determine which businesses are most likely to repay their loans.
PayPal recently announced that it had made $150 million in loans since launching its PayPal Working Capital lending program last year. Square, which provides capital to businesses in the form of merchant cash advances, recently said it had advanced $50 million to small businesses since first piloting its Square Capital program earlier this year.
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