Challenging PayPal, Square
BY DOUG TSURUOKA
INVESTOR’S BUSINESS DAILY
Amazon.com, in its biggest move in payments to date, said Wednesday that it is offering a secure card reader and mobile app that lets small merchants process digital point-of sale transactions.
Called Amazon Local Register, the products compete directly with similar offerings from Square, eBay’s EBAY PayPal, Intuit INTU and VeriFone Systems PAY.
The product can accept credit and debit cards loaded on smartphones or tablets. This includes Apple AAPL devices that run iOS7, Kindle Fire tablets and certain Android smartphones. Apple is widely expected to move deeper into the e-payments business.
Amazon AMZN says its reader will soon be included on its new Fire Phone.
Amazon Local Register’s big incentive for small businesses is its charge rate of 2.5% for each transaction. This is lower than the 2.7% rate per transaction charged by Square and PayPal. Also, Amazon is offering a promotion discount rate of 1.75% through Jan. 1, 2016, for customers who sign up before Oct. 31.
Product users have access to Amazon’s customer support team. Amazon says cash from transactions can be deposited in customer bank accounts within one business day — or spent on Amazon.com almost immediately.
The card reader costs $10, indicating Amazon expects to make little or no profit on the device itself. Customers can sign up for Local Register by creating an account at local register. amazon.com , purchasing the $10 card reader and downloading the free mobile app from Amazon Appstore, Apple App Store or Google GOOGL Play.
The card reader is also available with Prime Free Two-Day Shipping. Starting Aug. 19, Amazon says customers can buy the card reader at Staples SPLS outlets nationwide.
“From clothing stores to contractors, food trucks to accountants, businesses and organizations using Amazon Local Register will enjoy industry-leading low rates, trusted and secure payment processing, and access to award-winning customer support,” Matt Swann, vice president of Amazon’s local commerce unit, said in the company’s press release. “We understand that every penny and every minute counts, so we want to make accepting payments so easy and inexpensive that it no longer gets in the way of a business owner doing what they love — serving their customers and growing their business.”