Amazon is about to enter into the student loan business, alongside Wells Fargo, with the promise of cheaper rates for those who pay for a ‘Prime Student’ subscription. The decision means subscribers to the service will receive discounts, free and fast delivery, video streaming services and reduced fees for student loans as part of the $49-a-year package.

“Amazon’s looking for increased membership in Student Prime. That’s what they want out of this deal”, said the head of Wells Fargo’s personal lending division, John Rasmussen, in an interview with Reuters. “What we’re looking for is exposure to our products and services, and awareness. That’s the extent of the relationship.”

Those with an Amazon Prime Student subscription would be able to access a 2.89, as opposed to 3.39, percent rate

Ordinarily, Wells Fargo’s variable-rate student loan ranges between 3.39 and 9.03 percent, and 10.93 percent for a fixed-rate loan. Those with an Amazon Prime Student subscription would be able to access a 2.89, as opposed to 3.39, percent rate, according to a spokesperson at the bank, and would generally be eligible for a 0.5 percent discount. The exposure Wells Fargo will gain as a result of the partnership could prove a major boon to its business. In 2015, the bank had $12.2bn in outstanding student loans, and its ties with Amazon will likely build on its reputation as one of the country’s largest providers of student loans.

Crucially, the partnership with Amazon gives Wells Fargo more of an opportunity to differentiate its services from those of its competitors. The private student loan market is extremely competitive, and many, such as JP Morgan in 2013, have decided to exit the business line altogether. As the only loan provider in a position to offer discounts to Amazon customers, initial signs indicate that Wells Fargo, more than any other bank, is ideally positioned to capitalise on a US market in possession of over $1trn in university-related debt.