Move over Square, Amazon is diving into the payment processing business with its new service — Amazon Local Register, a mobile point-of-sale solution developed for businesses to accept credit and debit card transactions from a smartphone or tablet.
The online retailing giant isn’t afraid to try new things, and the company clearly sees a need in payment processing for small businesses, which is one of Square’s main customer bases. Plus Amazon is going all out, with a $10 card swiping machine and 1.75 percent charge per card swipe for a limited time, which is available to new customers who sign up before October 31.
Even after the promotional period, Amazon’s rate of 2.5 percent for every swiped transaction is highly competitive. Both Square and PayPal (News - Alert)'s point-of-sale services currently offer rates of 2.7 percent. Plus, the rates at all three companies are typically more competitive than many bank merchant programs.
Amazon is targeting small businesses, which often find traditional mobile payment processing complicated and expensive to set up.
Amazon, of course, can wield its status as a leading online retailer to negotiate rates. Coupled with the company’s penchant for exploring other revenue sources, it’s not really a huge jump for the company to start offering payment processing services to other businesses.
And there is money to be made, of course, with IBISWorld estimating the overall payment processing industry brings in $59 billion in revenue with an annual growth rate of 4.5 percent.
The Amazon Local Register mobile app is available on the Amazon Appstore, Apple App Store and Google Play for no charge. Card readers are available from Amazon, and customers can also purchase a card reader at Staples (News - Alert) retail locations nationwide beginning on August 19.
The Amazon Local Register card reader and mobile app are compatible with Apple devices running iOS7, Kindle Fire tablets, select Android (News - Alert) smartphones, and coming soon to the company’s new Fire phone.
Edited by Adam Brandt
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