Everything Is Becoming a Bank
4 hours ago
- #financialization
- #predatory-lending
- #bankification
- Major corporations are increasingly acting as unregulated banks, a trend known as 'bankification', which is leading to high profit margins but also increasing financial risks.
- Examples include Starbucks holding billions in customer rewards programs, airlines making more from frequent-flyer points than flights, and retailers offering high-interest credit cards.
- Tech companies like Apple, Google, and Amazon are expanding into payment processing and digital wallets, managing billions in uninsured deposits without traditional banking protections.
- Bankification is driven by the allure of high profits from fees and interest, but it poses risks like predatory lending, data privacy issues, and potential financial crises.
- Regulatory efforts to curb these practices, such as those during the Biden administration, have been rolled back, leaving consumers vulnerable to exploitation and debt traps.