The dispute is about the fees charged by Visa, which have recently increased due to Brexit. Interchange fees sit at the centre of this issue. This is a small fee levied by card networks such as Visa on every transaction made using its cards, taken to cover the cost of processing the payment. 

Under 2015 EU regulation, interchange fees were capped in the bloc of 0.2% for debit card transactions and 0.3% for credit cards. At the time of introduction, the EU said that the regulation would save consumers approximately $6 billion in hidden fees. However, post-Brexit, operators in the UK are no longer bound by these rules. 

According to the Financial Times, Visa planned to up its cross border interchange fees from 0.3% to 1.5% this year. Such fees, to be paid either by Amazon directly or by sellers on its platform, would erode profit margins and lead to more costly products if passed on. 

A spokesperson for Amazon said, "The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers. These costs should be going down over time with technological advancements, but instead, they continue to stay high or even rise.

"As a result of Visa's continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January, 2022."

The online retailer also advised its customers to update their default payment.

The speculation was initially sparked by an Amazon job advert for a “Digital Currency and Blockchain Product Lead” based at its Seattle headquarters. The job posting stated the position would be based within Amazon’s Payment Acceptance & Experience Team, with the role involving innovating “on behalf of customers  within the payments and financial systems of one of the largest e-commerce companies in the world.” This led some to suspect that the e-commerce giant was looking to accept cryptocurrencies in the near future. 

The speculation caused bitcoin and other cryptocurrencies to surge on Monday morning, with bitcoin up by 12% to $38,723 at around 8am in London. The surge marked bitcoin’s highest price in over a month. 

Growing numbers of companies have already begun accepting digital currencies as payment. However, Amazon has firmly denied these rumours, stating that although the company is interested in the space, the current rumours surrounding the company’s cryptocurrencies plans are not true. 

Finance ministers of the G20 economies have backed a landmark deal to prevent multinational companies from shifting profits to tax havens. The deal will introduce a minimum global corporate tax rate of 15% to deter big companies from exploring their options for the lowest tax rate. The deal will also shift how hugely successful multinationals such as Amazon and Google are taxed. Taxes for such multinational companies will come to be based partly on where they sell their products and services, as opposed to being based on the location of their headquarters. The deal marks an end to eight years of debate over the issue, with national leaders expected to give the deal the final go-ahead in October at the G20 Rome summit. 

Members of the G20 group include Britain, Germany, France, India, Japan, and Mexico. The group accounts for over 80% of global gross domestic product, 75% of global trade, and 60% of the globe’s population. While most G20 economies appear to be on board with the plan for a global tax crackdown, some countries are yet to sign the pact. These countries include Ireland, Hungary, and Estonia, and other non-European nations such as Sri Lanka, Kenya, Nigeria, Barbados, and St Vincent and the Grenadines. These nations are being encouraged to sign up to the agreement by October. 

Unsurprisingly, the market’s reaction to the grand breakthrough G7 announcement of a landmark “minimum corporate tax rate of 15%” is one such moment of noise over substance. While the announcement played brilliantly with the political classes who argued: “at last global corporate tax rates are being addressed and the largest tech firms will now pay their fair share”, does it mean corporates will suffer the ignominy of paying actual taxes?

Of course they will…not.

The share prices of the largest tech firms with the finest tuned tax-minimisation corporate structures barely yawned. The salaries of Corporate Tax Lawyers and Tax Accountants are already going North in anticipation of a feeding frenzy for their services. These professions set to reap windfall profits from the political posturing around the tax noise. They will dissect the deal’s underpinnings with a fine comb, identify the back doors, engage lobbyists to push for advantageous clauses, and get set to arbitrage every single facet of the deal – assuming it ever happens and becomes a reality.

If any European country ever receives anything close to a cheque for 15% of the profits made by a big digital tech company selling in their borders, I shall eat my hat. (I get to choose which one…) I’ve already seen a scheme from one accounting firm outlining how a major internet retailer that isn’t a river in Egypt can wriggle out because of the marginal cost calculations… something to with governments getting “the right to tax 20% of profits exceeding a 10% margin” – which sounds much less than 15% of profits the politicians blithely assure us they have secured.

But, of course, and tax deal is a win/win for everyone:

• The Sherpas of global finance say it’s a revival of “multilateralism” as nations come back together in the post-Trump era to solve “critical challenges facing the global economy”.
• The Politicians are all over it like a rash – looking forward to all that lovely US tech money to spend… while claiming to have righted a massive historical wrong in the lack of cash paid by many firms.
• Corporates will be delighted. A chance to show they support the good cause of tax equality, while behind the scenes, they keep emptying our wallets.
• National tax agencies won’t bat an eyelid. They know better than to go for the big tech firms. Such firms are heavily tooled up with the best tax lawyers. It’s much easier to go from small businesses that tend to cave quicker to HMRC threats.

On the face of it, the Irish should not be particularly happy at the loss of the jurisdictional arbitrage advantage – but even they are smiling. They know big European-tax dodgers aren’t going to haul out of Dublin any time soon. Many may decide to beef up their tax special-forces in Ireland in the expectation any tax deal is still years away from full ratification by all the members of the OECD, and that it may not happen at all… ever.

And there is no guarantee the Americans are going to accept it. Political gridlock and a Republican Party in thrall to the Beast of Mar-a-Lago means if it looks bad for America, then it hasn’t a breeze of passing. The reality is the new G7 minimum tax proposal is going to struggle to get through the slough of despond that is deepening US political gridlock. The Republicans are already parroting Trump that such a deal can’t be good for US Company revenues, therefore should be rejected.

What will the G7 tax deal mean for markets?

It’s going to be a busy time for the credit agencies, figuring out if the shock horror of corporates actually paying taxes in countries where they sell stuff, pushes a few names down a credit notch or two because paying taxes comes before paying bondholders. I’d be surprised if they find many lame ducks – but the credit agencies won’t miss the opportunity to be relevant and will no doubt start pumping out research for bond managers to fall asleep over.

In the real markets, experience equity investors know corporates will find new and better tax avoidance schemes to supersede whatever the agreement outlaws. As one wag once pointed out: “if you’re paying taxes on profits, you ain’t doing it right.”

That leaves an interesting thought: what about all the US tech firms now sitting on enormous cash piles, built up from untaxed profits channelled through corporate headquarters in nations willing to charge zero taxes – like Ireland? Retroactively taxing these untaxed gains isn’t on the agenda and will never ever happen…. Better spend the money on acquisitions, infrastructure, etc… heaven forbid paying staff better. But company spending is an economic multiplier – so it’s a good thing. Right? It will push up the stock price and allow Jeff Bezos to fund his trip to the moon…

I suspect that in the long run, all we will ever remember about the successful G7 agreement on tax was that there was an agreement… it will be rigorously enforced… and the tech giants still won’t pay very much tax.

Long criticised for the small percentages they pay in tax, big companies such as Google, Microsoft, and Apple will be pushed to pay more following a historic move by the G7 group of wealthy nations. The deal states that large multinational enterprises would pay a global minimum corporation tax of 15%. For the largest global companies, such as Amazon, 20% of profits would be reallocated to the countries where the sales originated from. 

In a tweet, US Secretary of the Treasury, Janet Yellen, highlighted the importance of a global minimum tax. She stated that it would "help the global economy thrive, by levelling the playing field for businesses and encouraging countries to compete on positive bases". 

However, experts have warned that Amazon may escape increased taxation unless a significant loophole in the deal is resolved. The move would exclusively apply to profits that exceed a 10% margin for the largest multinational enterprises. Due to its incredibly low profit margins, Amazon could be ruled out. According to a report by The Guardian, Amazon saw profit margins of just 6.3% in 2020, putting the multinational tech company significantly below the 10% taxation threshold. Despite having a net worth of $314.9 Billion, Amazon’s slight profit margins could potentially save the company from increased taxation costs. 

Experts have recommended broader global negotiations at the G20 summit, which is set to take place in Venice this July. They say that tougher rules need to be put in place to prevent big companies from adjusting their operations to remain below the 10% threshold.

Good tech firms rise because they create new value. 15 years ago, Amazon was a mystery – what was the point in a delivery company not making any money? Apple was building a niche with new gizmos like the iPod, while Facebook was one of many banal social media sites we could hook up on. Uber and AirBnB didn’t exist. If you wanted to watch a film before the video was released, you went to Blockbuster.

Now, these same tech firms are worth trillions – because they created entirely new markets and new revenue streams. They carry substantial growth premia: Facebook consumed its rivals while its targeted advertising becomes more sophisticated allowing it to rake in money. Apple has become the most valuable company on the planet – by creating an ecosystem of IOS addicts to buy its constantly upgraded models that haven’t innovated anything fundamentally new in 10 years. Amazon is indispensable as the place stuff comes from. Google is successfully monetising every aspect of our lives. And Netflix…Netflix is an outlier. It’s great. My family couldn’t live without it – anything is better than watching the BBC news. Although Netflix invented the concept of a streaming service, it’s now just one among many. When Disney launched its streaming service in 2019, it was able to attract more subscribers faster – because streaming demands great content. If you want great content, Disney has it in spades. Netflix invented streaming, but Disney will dominate.

Generally, the success of companies that innovate new markets underlies their initial success. It also causes hype – when every investor thinks every new exciting tech launch is going to replicate the success of Amazon or Apple, it’s wise to remember tulip markets and step back and consider. This year’s big story has been ZOOM – worth billions because everyone on the planet suddenly learnt it exists and started using videoconferencing.

Or how about the blowout record-making IPO success of Snowflake – the cloud-computing solutions provider? Snowflake competes in a very crowded market. Its rivals have been making very healthy billion-dollar profits for a number of years. One firm, 40-year old Teradata, makes $2 bn revenues from its cloud activities and is valued at $2.5 bn. But brand-new Snowflake makes $250 million revenues, runs at a loss and is worth $80 billion – despite doing essentially the same thing as profitable Teradata. But Snowflake is new – and investors seem to be believing the old market lie: “this one is different”.

Tesla is a bubble. But it's one that, thus far, hasn’t popped.

Nothing illustrates the hopes and expectations that drive tech stocks as well as Tesla. It’s a fascinating company. It has created an entirely new market in electric vehicles, and it also dominates the battery tech. It is successfully making and selling cars and setting the market’s agenda.

There are two different views on Tesla:

There is the “you don’t understand” perspective favoured by the Tesla fan-club. They have some good points. They stress Tesla is a long-term play on the future not just of cars, but everything about capacitance (batteries), personal transport and power. It’s created and taken leadership of the expanding non-ICE (Internal Combustion Engine) market. It’s got proven battery technology and it’s collected massive amounts of data that will enable to lead autonomous driving – enabling Tesla owners to run their precious cars as self-driving taxis when they aren’t using them. The Tesla fans say the traditional financial markets don’t understand what massive future value the firm has created.

The market clearly believes in Tesla. It’s worth over $400 bn dollars despite making less than $1 bn profit in the last 12 months (the first time it’s ever posted an annual profit). While most car companies trade on modest single-digit multiples, the market clearly believes in Tesla’s exceptionalism at a plus 400 multiple.

Even though it produces less than 0.5% of global auto sales, Tesla is worth 2.5 times as much as Toyota which builds over 10% of the world’s cars, each year posting healthy profits of $23 bn on 10 times multiple. The big three US auto companies make 18 million cars per annum and post profits most years.

The unbelievers say Tesla’s minuscule profits after 10 years of developing their car model means it’s just a small niche player. They say it’s too reliant on selling carbon-regulatory certificates – every car it sells is sold at a loss. Ferrari makes 23% margin on each car while Tesla loses money. Naysayers don’t believe the hype around batteries – pointing our newer, cleaner battery tech, which can charge in seconds, will make every Tesla obsolete overnight; sometime in the future. They say Tesla’s batteries, actually made by Panasonic, won’t set the industry standard. The Chinese are saying they already have million-mile batteries, and although Tesla got a Chinese factory up and running in record time, the Chinese are outselling it.

Even sceptical financial analysts accept that Tesla makes good cars, but they believe that it needs to massively increase its margin per car and increase production at least 10 times to justify a stock price even half of its current value. In short - Tesla is a bubble. But it's one that, thus far, hasn’t popped.

But it will.

What’s driven Tesla to such stratospheric values is a result of some extraordinary factors. Founder Elon Musk is regarded by fans as a far-sighted prophet of genius. To detractors, he’s an arrogant market manipulator, hypester and snake-oil purveyor. Musk attracts the hopes and dreams of retail investors who are jumping on board the Tesla party bus. Good luck to them.

The main issue Tesla fans are missing is the same thing that is going to test Netflix and a host of other overpriced tech stocks: Competition.

Every other automaker gets what Tesla is doing. So far no one is doing it better. Someday, very soon, someone is going to launch something better. It might not be anything like Tesla, or it might just be much, much less hyped.

It is forecasted that mobile banking is set to be more popular than visiting a high street bank branch within two years. And as the banking industry continues its digital journey, Mark Grainger, VP Europe at Engage Hub, says consumers are coming to expect more control over their data, greater convenience, and “anytime, anywhere” accessibility.

Mobile-first consumers

So far, most banks worldwide have handled the mobile era in exactly the same way, simply shrinking down traditional bank accounts and putting them on a smartphone screen without offering real innovation or engagement.

But simply pouring millions into innovation hubs and piecemeal digitisation strategies isn’t going to deliver the kind of results that will win over those tempted by the challenger banks. Traditional banks need to shift gears and use the valuable information they already have to provide customers with seamless interactions across different channels.

At the same time, banks need to understand that the digital banking revolution is more than a mobile app. It’s about creating an entire experience. The implications of failing to facilitate a seamless cross-channel customer experience – one that lives up to growing customer expectations – is huge. Today, consumers have more choice than ever before, thanks to the rise of fintech start-ups and digital-only banks, and if they do not get the level of service they’ve come to expect, they will not hesitate to take their business elsewhere.

Subscription service model

Using a service model patterned after Amazon Prime or Netflix may seem odd to many retail banks, but challenger banks are already experimenting. Would consumers pay a subscription to get the same service they do with Amazon and Netflix? The answer is yes.

Revolut is already showing itself as a front runner in subscription-based banking. The challenger provides a ‘freemium’ model, which gives users a free UK current account and a free euro IBAN account that offers no fees on exchanging in 24 currencies, up to £5,000 a month. Revolut also provides monthly subscription plans with higher thresholds for no fees, as well as instant access to crypto-currencies, cash back, travel insurance, free medical insurance abroad, airport lounge access and priority support.

Research shows that in the UK 57% of people would be willing to pay an extra monthly fee for additional services from their banks. Most consumers – 45% – would like additional media services such as Netflix and Amazon while 40% prefer earned cashback and 37% would pay for overdraft facilities.

Considering that at present, 72% of customers don’t pay any monthly fees to their banks it’s fair to say that there is a great potential for financial institutions to leverage these services and elevate their game when it comes to competing against challenger banks and unconventional financial services.

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Trust and value

Furthermore, traditional banks have a crucial asset compared to challenger financial institutions, and that is trust. Traditional banks have a much longer and seemingly more robust security record.

The paradox is that many people trust their primary financial provider but distrust the financial services industry overall. Therefore, banks that want to persuade their customers to adopt new models and pay a potential monthly fee have to prove that they have customers’ interest at heart.

One way to achieve this is through transparency. The financial services industry still lags behind other sectors when it comes to transparent policies, costs and customer data. This needs to change and they need to show that they are keeping pace with the market trends and customer expectations.

Another crucial aspect banks need to keep in mind when it comes to monthly subscriptions is the added value they would bring to customers. If they agree to additional costs, consumers will also expect extra benefits and not just the same things they used to get for free. Without additional value added, it will seem that banks are trying to simply make some extra money thus confirming customers’ distrust in financial institutions.

If they agree to additional costs, consumers will also expect extra benefits and not just the same things they used to get for free.

Bank of America, for example, learnt this lesson the hard way when they wanted to charge their customers a $5 fee for using their debit cards for purchases. The backlash was swift and strong, and the bank had to cancel the plan within six weeks.

To avoid such situations, banks need to focus on their customers’ financial health and create personalised and holistic value propositions that will provide a competitive edge against challenger banks and convince millennials that they can provide safe and innovative solutions for life’s complex challenges.

By understanding these strategies and embracing the changes in consumer buying behaviours, financial institutions will be able to create new ways to generate recurring value for their customers and new sources of predictable income.

Key skills

However, in order to transform their approach to digital transformation and subscription models banks will also need the right skills and capabilities.

A new CBI/TCS report highlights the UK’s rapidly accelerating digital talent gap as new technologies transform the way we live and work. Currently, the UK is losing out on £63bn a year as companies struggle to find people with digital skills. Areas of banking that need to be a focus for investment include the use of AI in customer profiling, money laundering detection and improving customer services. All of these investments require emerging technology to be implemented, and employees with the skills to manage it. Banks will need to implement training programmes, smart hiring strategies, and strategic digital transformation programmes to attract tech talent and implement a customer experience to rival challenger banks.

And whilst providing subscription services to their customers might require considerable resources and a significant shift in strategy and policies, engaging the new generation of digital-first customers is paramount if traditional banks want to remain relevant and fend off challenger financial institutions. Harnessing this opportunity will provide a critical competitive edge, inspire loyalty and make customers feel valued.

Many industries have already adopted this system and have reaped significant benefits already. It’s high time for traditional banks to challenge the current status quo as well and reap the benefits of a subscription model.

If it was possible to rewind back to 1999, we’d all invest in Apple stock instead of that VHS Recorder. In a new study by SmallBusinessPrices.co.uk, we analyse the priciest stocks of 2019 and what you could have bought with $100 over the decade.

Amazon is the most expensive stock, with the average stock price calculating to a whopping $1,752 - meaning $100 couldn’t buy you any stock, whilst in the year 2000 you’d be able to afford just two.

As one of the top e-commerce platforms in the world, Amazon gets more than 197 million visitors each month, and in 2018 the company’s share of the US e-commerce market hit 49%.

Based on the average stock price of Apple in 2000, $100 could have bought you around 35 stocks, whilst this same value wouldn’t buy a single stock based on 2019’s average stock price.

Steve Job’s innovative and visionary approach led to Apple becoming one of the biggest tech giants in the world. The launch of the iPod revolutionised the portable media player market, eventually launching iTunes which essentially changed the world’s understanding of digital media and the music industry.

Who’s worth more?

Microsoft top the leaderboard this 2019, with the company’s net worth being valued at $1 trillion - one of the only three companies to pass this figure, with Apple and Amazon being the other two in recent years.

Amazon takes second place for net worth, being worth around $928.5 billion, whilst Apple follows behind on $892.1 billion.

Despite Apple taking third place for net worth, the brand still remains champion for yearly revenue. In 2018, the giant made over $265.6 million - higher than both Amazon and Microsoft who made $232.9 and $110.4 million respectively.

What are unicorns? 

A unicorn business is a startup with a valuation of $1 billion, they are privately held and rely on venture capital. The name ‘unicorn’ comes from the rarity of businesses gaining such success.

Which sector is taking the lead?

Despite unicorn companies being private and not being publicly traded, if you’re hot on investment and want to keep an eye on which sectors seem to tip the edge, we’ve taken a look at the sectors which are most likely to become unicorns.

With over 360 companies being valued at $1 billion this year, the e-commerce sector took the lead, with 42 companies being declared as unicorns. This was closely followed by Fintech, which saw 39 companies join the leaderboard, whilst Internet Software & Services took third place with 32 companies.

Ian Wright from SmallBusinessPrices.co.uk stated: “Unfortunately we can’t go back in time and invest that $100 we spent on junk, in Apple or Amazon! However, this research reveals just how quickly some of these brands have grown in the last few years, and how privately held start-up companies are also experiencing huge valuations from investors taking big risks to be successful.”

Investments of the 2000s

To see how much $100 could have bought you in the 2000s, or find out more about unicorn start-ups in more detail, you can take a look at SmallBusinessPrices.co.uk’s tool here.

When my daughter was very young, she had a favourite dummy. One evening, just before bed, we were alarmed to discover the dummy was missing. As soon as we finally got her to sleep (no easy feat!) I grabbed my mobile, asked Alexa to find my daughter’s dummy, and immediately purchased two for next day delivery. I’m not sure who was happier—my daughter, who was reunited with her beloved dummy, or me, who was able to fix a problem easily, quickly, and painlessly, thanks to Amazon.

The problem with this scenario, of course, is that Amazon does much more than sell dummies. They’ve disrupted nearly every industry with the same level of speed, convenience and customer satisfaction, and now they’ve set their sights on the financial services industry.

If you’re not worried about this tech giant’s potential impact on financial services, you’re not paying attention. That said, there’s no reason to throw in the towel, hand over your bank and admit defeat. Rather, financial institutions can leverage their concern to drive innovation, focus on their strengths and fight back.

Let’s face it—Amazon is entering the banking space with many advantages. A massive pre-existing customer base, unlimited advertising space, and pre-built channels, such as Alexa, the Kindle, and Amazon.com, to name a few. Their biggest advantage, however, is their ability to innovate an experience. Look, for example, at the act of reading. Amazon transformed that experience by taking books, which they’d already mastered, and making them digital. What might they do with something like money, which is already an almost purely digital asset?

One misstep and Amazon could go the way of Facebook, which has spent years struggling with trust issues and data breaches.

Despite these benefits, Amazon faces some challenges. Although they’ve shown that they can mine my data to find the exact dummy I need quickly and efficiently, they have yet to prove they can be trusted with my bank account. One misstep and Amazon could go the way of Facebook, which has spent years struggling with trust issues and data breaches.

This is not to say that financial institutions don’t struggle with being seen as trustworthy by their customers. What this means for a bank, however, is different. Generally, people trust a bank to hold their money, but that trust is tested when they need to resolve a problem or avoid a fee. Trust also wavers by generation. According to a recent PwC survey, 72% of baby boomers trust their primary financial institution the most with their money, while only 53% of Generation Z felt similarly. Less trust means more opportunity for competitors like Amazon.

If banks want to stay ahead of Amazon, they must preserve the trust they have by improving on the things Amazon does well—operational efficiency, transparency, convenience, and a near maniacal focus on the customer.

First, financial institutions must put the right technology platform in place. Amazon is a pioneer of data-driven decision making. Everything from new products to new acquisitions is based on the stockpiles of data they’ve gathered from their customers. If financial institutions want to compete, they must be able to access and leverage their own stockpiles, rather than letting data sit in silos, inaccessible and unusable. To do this, banks must embrace both a single solution to store clean, ready to use data and a single platform that can actually deliver value from that data. Knowledge is power, but only if you know where to find that knowledge and how to use it.

Next, banks and credit unions must go digital. Today’s customers are used to a world with Amazon, Netflix and Uber, where they can get whatever they want, immediately and on-demand. Financial institutions must offer the same options by giving their customers a frictionless experience, whether in the branch or online. Remember, the customer should be at the centre of every interaction. If a process or system is cumbersome for the bank, you can guarantee the customer is going to suffer, too. Convenience is king, and nothing is more convenient than conducting your financial life whenever and wherever you want.

Financial institutions must design experiences for the customer.

At the same time, financial institutions should think innovatively about how they engage with their customers. If you have one platform, then digital isn’t a disjointed experience. You can easily transition from simple to complex products based on the customer’s needs. This means you can think like Amazon, and find ways to meet your customers where they are, in the channels they’re already using.

Finally, financial institutions must design experiences for the customer. You can be in all the right channels with the best platform in place, but if your journey is only designed to make it easier for the bank, it won't be very effective. If you look at FinTechs that have succeeded thus far, it's not because the product was cheaper. It's almost always because they gave their customers what they wanted faster. The biggest winners at this point are going to be those institutions whose maniacal focus on their customers leads to delightful experiences that don’t sacrifice the safety and soundness of the bank.

By tackling these challenges, embracing digital transformation and prioritising customer experience, financial institutions will be able to compete with Amazon and any other tech giants who may want to enter the banking sector. And if Amazon ends up losing sleep over their inability to take over the financial services industry, I’m happy to recommend a good dummy.

A study by City Index revealed the financial reports of the worlds biggest brands to reveal exactly how long it took each to make their first $1 billion, as well as how fast they make a billion today.

They compared this data to how fast it would take the world's biggest brands to make the average UK salary, and the results are mind-boggling:

1. Walmart – 2.16 seconds

Industry: Retail
Total Revenue: $500,343,000,000
First Billion:18 years
Latest Billion: 0.7 days
Did you know?
While McDonald’s recently announced plans to roll out more self-service pay kiosks, Walmart revealed plans to bring more cashiers back. The move came after reports that self-service checkouts hadn’t helped operating margins and left customers unsatisfied.

2. Apple – 4.32 seconds

Industry: Tech
Total Revenue: $265,595,000,000
First Billion: 14 years
Latest Billion: 1.4 days
Did you know?
In August 2018, Apple became the first public company in the world to hit the trillion-dollar mark after share prices rose to $207.05, sending the tech giant to all-new heights. This landmark moment came just 42 years after the company was founded.

3. Amazon – 6.48 seconds

Industry: Retail
Total Revenue: $177,866,000,000
First Billion: 5 years
Latest Billion: 2.1 days
Did you know?
In June 2018, Investopedia named America ‘the United States of Amazon’ as the company’s Prime memberships tipped over the 100m mark. Fast forward to September of the same year and the retail kings became the second $1 trillion company, just weeks after Apple became the first to hit this impressive milestone.

4. Walgreens - 8.64 seconds

Industry: Retail
Total Revenue: $131,537,000,000
First Billion: 110 years
Latest Billion: 2.8 days
Did you know?
Walgreens recently revealed it had spent $500 million on building, testing, and implementing new IT systems for its US stores, with plans to spend a further $500 million. This news came as the brand faced competition after CVS Heath bought out the country’s third largest health insurer and Amazon announced plans to enter the pharmacy market

5. Google - 10.19 seconds

Industry: Tech
Total Revenue: $110,855,000,000
First Billion: 5 years
Latest Billion: 3.3 days
Did you know?
Google was fined $2.7 billion for breaching European Union antitrust rules in June 2017 after it was found to be using its search engine to steer users to its own shopping platform. Luckily for the tech giants, this figure was dwarfed by its $110 billion revenue in the same year.

6. Microsoft - 10.19 seconds

Industry: Tech
Total Revenue: $110,360,000,000
First Billion: 15 years
Latest Billion: 3.3 days
Did you know?
In October 2018, Microsoft announced it had acquired coding platform GitHub for $7.5bn, expanding the brand’s developer tool and services offering. The deal is rumoured to have made GitHub’s three founders billionaires.

7. Target - 15.75 seconds

Industry: Retail
Total Revenue: $71,879,000,000
First Billion: 87 years
Latest Billion: 5.1 days
Did you know?
In a bid to fend off competition from Amazon and bring its business model up to date, Target purchased same-day delivery service Shipt in 2017 for $550 million. Target is hoping that its $99 annual Shipt membership ($20 cheaper than Amazon Prime) and commitment to delivering a wider range of products will see it eat into Amazon’s profits throughout 2019.

8. Walt Disney - 18.83 seconds

Industry: Entertainment
Total Revenue: $59,434,000,000
First Billion: 69 years
Latest Billion: 6.1 days
Did you know?
The bidding war to takeover 21st Century Fox isn’t the first time Disney and Comcast have come to blows. In 2004, Disney curbed Comcast’s unsolicited bid to take it over, which caused a huge rift between Disney CEO Bob Iger and Comcast CEO Brian L. Roberts.

9. Facebook – 27.79 seconds

Industry: Tech
Total Revenue: $40,653,000,000
First Billion: 6 years
Latest Billion: 9 days
Did you know?
Facebook shares were down 7% in March 2018 after a data scandal dominated the headlines around the world, equating to an estimated loss of $40 billion. Chief Strategy Officer of GBH Insights, Daniel Ives, commented that the social media channel could lose $5 billion in annual revenue if it failed to assure its users and government agencies.

10. Time Warner Inc – 36.12 seconds

Industry: Entertainment
Total Revenue: $31,271,000,000
First Billion: 7 years
Latest Billion: 11.7 days
Did you know?
With around 26,000 employees worldwide, Time Warner’s impressive entertainment property portfolio includes Warner Bros., HBO, New Line, and Cartoon Network. Blockbusters such as Wonder Woman, Dunkirk, and It contributed to the company’s $31.3 billion revenue in 2017.

“Potential for growth in today’s market is significantly greater than before”

Fiona Cincotta, a Senior Market Analyst at www.cityindex.co.uk, said: “The markets have changed dramatically over the past 30 years, not just in composition, but also how quickly a firm can grow. From the data, the earlier the business was founded, the longer it took to reach its first billion in revenue.  

“While firms founded at the turn of the last century, such as Walgreens or Target, have taken over 100 years to hit the $1 billion mark, more recently founded companies such as Facebook or Amazon have hit the milestone in next to no time. Potential for growth in today’s market is significantly greater than before. 

“It also comes as no surprise that while tech firms and retailers are among the quickest companies to hit $1 billion in revenue, but traditional retailers are the slowest. This is yet another piece of evidence highlighting the struggles that more traditional retailers on the high street are up against as shopper’s habits move away from bricks and mortar stores to online shopping and technology."

(Source: City Index)

Finance Monthly delves into the potential impact of an ‘Amazon tax’ and the alternative solutions that can help the struggling British bricks-and-mortar retailers.  

With a series of high-profile collapses and CVAs, including the recent turbulences that House of Fraser is faced with, Britain has seen its fair share of high-street horror stories in 2018. Stores like Toys R Us UK, Maplin and Mothercare are all facing extinction, whilst online retailers such as Amazon are stronger than ever, cashing in $2.5bn per quarter and paying less and less corporation tax with Amazon’s UK tax bill falling about 40% in 2017, and it paying just £4.6 million ($5.6 million). In times like these, the UK retail industry has naturally called on the Government to review its outdated corporation tax system and take action to help the struggling high street. Chancellor Philip Hammond has in turn announced that he is considering a special retail tax on online business, dubbed the ‘Amazon tax’, in order to establish a “level-playing field” for online retailers and high-street shops. But is a new tax really the solution that will balance the market out? Will it be the solution that traditional trade needs? 

Is Amazon’s Existence the Biggest Problem?

Consumer habits are changing rapidly with the continued growth of online shopping, but the truth is that the extraordinary success of web traders is only one of the aspects to consider when looking for the reasons behind the decline in traditional retail. And even though a hike in the tax that Amazon pays may seem like a necessary and logical step, it will be nothing more than a minor distraction from the bigger issue and something that will mainly benefit the Treasury.

It is worth noting that the UK store chains that have collapsed recently did so due to not having the right products at the right prices, not staying up-to-date with consumer trends, not targeting the right customers or not investing enough in their businesses. Surely, online-only merchants have transformed the trade landscape and the UK tax system needs to be adjusted in order to reflect the current retail dynamics – especially when Amazon’s tax bill for 2017 was only £4.6 million on £2 billion of sales. But is the fact that the web giant is paying such a low amount of tax the reason for the collapse of a number of bricks-and-mortar retailers? I think not.

Moreover, as Bloomberg points out, an internet shopping tax could end up backfiring and hurting the bricks-and-mortar retailers it is intended to help. According to the British Retail Consortium, in 2017, more than 17% of sales were made online. Over half of them were with businesses that also have shops. Thus, retailers such as Next Plc, which has both online and offline businesses, could face “a double tax whammy”.

The Real Problem

Driving restrictions around city centres, increased parking charges by local councils and state demands such as minimum wage legislation and Sunday trading laws have had a negative impact on bricks-and-mortar retail. Then there is the main challenge in the face of sky-high business rates which have been the bane of countless entrepreneurs trying to establish a high-street presence. In an article for The Telegraph, Ruth Davidson wrote that the UK retail sector, which makes up 5% of the country’s economy, is paying “25% of all business rates, over £7 billion per year”. One might argue that in order to help bricks-and-mortar retailers and keep British town centres bustling with thriving commerce, politicians could perhaps work towards reducing the financial burden they’re faced with, before punishing web giants for offering an easy and convenient way to shop in this digital era. In order to keep up with their online competitors, traditional stores need to focus on technology innovation and redesigning the experience that the modern-day customer expects. But most importantly, they need the budget to do so and a reduction in business rates for high-street stores could be one way to provide them with some extra cash to invest in technology.

Another thing to consider, as Andrea Felsted suggests, could be raising business rates for offices and warehouses and cutting them for shops. That would “address the disparity between shopfront-heavy retailers and online-only businesses, which rely on distribution centres to serve their customers”.

A potential Amazon tax for all web-only retailers will not help bricks-and-mortar retail to innovate. Surely, it will level the playing field, but apart from that, all we can expect will be a slowdown in online shopping without doing anything to solve the current problems that traditional traders are struggling with.

Online research from Equifax reveals over half (51%) of Brits under 45 years old would be interested in banking products or services from technology giants like Apple, Amazon or Google. Of those, 45% said that products or services like loans, credit cards or current account from these technology companies would only appeal to them if they offered better value than their existing bank.

Across all age groups, the level of interest in banking products from leading technology firms falls to 40%, with over a quarter (27%) of Brits stating they would rather use their existing bank as they’re more familiar with them.

Jake Ranson, Banking and Financial Institution expert and CMO at Equifax Ltd, said, said: “The recent announcement that Apple is joining forces with Goldman Sachs to launch a consumer credit card highlights how tech companies plan to shake up the banking industry, creating products and services to compete against the big high street banking names as well as newer digital entrants.

“Although a sense of brand familiarity pins many people to their current bank, there’s an appetite for new products and a desire for alternatives that can offer something genuinely different. The tech giants have a loyal brand following in their own right, if they can combine this with a competitive product offering we’ll see an interesting shift in dynamics as the fight to attract customers heats up.”

(Source: Equifax)