E-commerce giant Amazon jumped into the US mobile payments market, threatening to make life uncomfortable for the likes of PayPal and Square with its pricing.
Amazon Local Register is a card reader and free mobile app that enables local businesses to accept credit and debit cards on a smartphone or tablet.
The launch has been mooted for some time, most recently by leaked inventory from Staples. The US retailer will start selling the card reader from 19 August, Amazon confirmed. And the reader is available from Amazon.com from today (13 August).
While the launch itself is not out of the blue, Amazon’s pricing of its new service is more interesting.
It is undercutting major rivals Square and PayPal with its introductory offer. It will charge a fee of 1.75 per cent per transaction to process all major credit and debit cards.
For users signing up by 31 October, that rate holds until end-December 2015 before going up to 2.5 per cent. Any users missing the end-October deadline will pay 2.5 per cent straightaway.
In comparison, Square offers a fee of 2.75 per cent while PayPal Here charges 2.7 per cent.
However users must pay $10 for the Amazon card reader (although it will credit back the first $10 in processing fees). In contrast, Square and PayPal both offer free readers.
In addition, Amazon is talking up the additional benefits of its service, which include Amazon.com customer support and in-app tracking tools for small businesses.
The card reader and app are compatible with a number of smartphone and tablets, including Apple devices running iOS7, the Samsung Galaxy S3, S4 and S5 handsets and Kindle Fire tablets. It will come soon to Amazon’s new Fire phone.
The app is available in Amazon Appstore, Apple App Store and Google Play.
Amazon did not reveal any launch plans for the service outside the US.