Banks are cozying up with tech firms

Wall St. and FAANGs will soon run the world hand-in-hand

Hey everyone! I hope all of you were able to enjoy a sunny weekend and celebrate a happy father’s day 🥳

Tech - bank partnerships

Wondering how so many tech companies offer financial services? They partner with banks, of course! If you’re a big fish like Amazon, you call up your counterparty at Goldman Sachs and get a deal done. However, if you’re a new upstart, like Truebill, you call up NBKC bank (we’ll get to this later).

Recently, Amazon partnered with Goldman Sachs to enable its merchants to acquire credit lines up to $1 million. This is a big deal for many reasons:

  1. Merchants can easily acquire business loans in minutes with a digital application and real-time approval (Amazon does user experience really well).

  2. Amazon gets to keep its sellers happy and in business, as well as generate a new stream of revenue from the credit lines.

  3. Goldman Sachs gets to offer high-margin credit lines (6.99% to 20.99% APR) with nearly no acquisition costs.

Essentially, Amazon worked a deal to ensure it’s flywheel (see below) keeps spinning efficiently by locking in sellers with fast and easy loan opportunities. Goldman wins cost-effective business, diversifies its portfolio, and gets to boost its Marcus-lending division’s brand awareness.

In our last newsletter, I mentioned that large tech companies will soon enter the financial services game by offering their own credit lines. In the short term, I think we’ll continue seeing more partnerships between the two industries as banks open themselves to more alternative lending opportunities. Currently, chartered institutions, like NBKC, have pioneered the partnership model. In return for enabling fintechs, like Venmo, Betterment, and SoFi (see others here), with traditional banking products, they acquire low-cost deposits and asset-light fee streams. In the long term, I strongly believe (and this is a pretty bold assumption) that large tech players, like Amazon, will either buy a small bank or seek approval for their own banking charter. This way, they get to own their customers’ end-to-end experience, including all of their data, as well as expand their revenue streams into the lucrative lending industry.


  • American Express entered into a partnership with LianLian DigiTech, a Chinese fintech, last week. This means AMEX can start to process local currency and gain an initial foothold into China’s $45 trillion financial services industry. Read more about it here.

  • If any of you are looking to learn about launching your own startup, you should definitely check out Startup School, a free community-driven program managed by the prolific Y-Combinator. For a list of resources, check out this link.

  • In other news, we pitched in front of four early-stage venture capitalists at the Starta Ventures Pitch Contest and won first place! The judging panel included Delian Asparouhov (Principal at Founders Fund), Robert Harary (Early Stage VC Investor at Evolution VC Partners), Gregg Smith (Founder of Evolution VC Partners), and Nicholas Weber (Early-Stage VC at Capital Factory). In case you’re into social proof, I think these guys just helped validate your decision to join Reconcile 😉. Link to post.

Meme of the Week

RIP to my iPhone 6 and 7 screens 🤦🏽‍♂️

Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

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