Amazon introduces mobile card reader to compete with Square, PayPal

The company is entering the U.S. market with a promotional offer on transaction fees

Amazon takes aim at Square with Local Register

Amazon takes aim at Square with Local Register

Amazon.com has introduced a card reader coupled with smartphone and tablet apps that aim to provide small businesses with a way to accept payments on these devices.

The company is positioning its Amazon Local Register as a secure card reader and mobile app that will provide local businesses a broad set of tools to accept credit and debit cards through a smartphone or tablet and keep track of their operations, it said Wednesday.

The service can only be used to accept payments in the U.S., and a U.S. bank account is required for transferring funds from the Amazon Payments account to the user's bank account.

The online retailer will compete with established players in the market, including Square, Intuit and PayPal, which also offer small card readers that can be attached to smartphones and tablets. PayPal Here, Square and Intuit QuickBooks GoPayment, for example, offer the card reader device free.

The fierce competition has not gone unnoticed by Amazon, which is offering customers who sign up for the service before Oct. 31 a promotional rate of 1.75 percent per card swipe on all major credit and debit cards through Dec. 31, 2015. After that, they will pay 2.5 percent per swipe. Customers who sign up after the promotional period pay a flat rate of 2.5 percent on all swiped transactions.

Square collects a fee of 2.75 percent per swipe, while PayPal Here charges 2.7 percent per swipe transaction in the U.S. and Intuit's GoPayment starts at 1.75 percent per transaction.

Customers can create accounts on Amazon Local Register by creating an account on localregister.amazon.com, purchasing the US$10 card reader, and downloading a free mobile app from Amazon Appstore, Apple App Store or Google Play. The $10 paid for the card reader will be repaid through a setoff towards the first $10 in transaction fees. The card reader will also be available for purchase from Staples retail outlets in the U.S. from next Tuesday.

Amazon's card reader and mobile app work with Apple devices running iOS7, Kindle Fire tablets and select Android smartphones. It will be offered soon on Amazon's Fire phone, the company said.

The Amazon Local Register like many of its competitors will offer additional tools for businesses such as to help them track their businesses, monitor sales growth, and provide register functions like adding discounts and issue refunds.

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Tags internete-commercepaypalIntuitamazon.comInternet-based applications and servicesSquare

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John Ribeiro

IDG News Service
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