Amazon Launches into Mobile Payments Arena
Amazon has announced the launch of Local Register, a mobile payment service and smartphone-compatible credit card reader that will compete with offerings from Square, PayPal and Intuit.
The service will be principally targeted at smaller retailers and food trucks. Amazon is undercutting its rivals with low processing fees, to appeal to smaller merchants. Amazon’s initial 1.75% fee compares with Square’s 2.75% and PayPal’s 2.7% fees. Merchants using more traditional card processors may pay up to 3% per transaction.
However, the low rate will apply only to merchants who sign up between now and October and will expire in early 2016, after which it will become 2.5%.
Amazon added that its payment service is backed by the same technology that powers Amazon.com purchases. The app that hosts the service is available free, and businesses that sign up will receive the card reader via mail. Although the reader costs US$10, Amazon said it would credit the first US$10 in fees back to a merchant’s account.