Amazon introduces mobile card reader to compete with Square, PayPal

amazon local register

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

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.

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 go head-to-head 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, purchasing the $10 card reader and downloading a free mobile app from either the Amazon Appstore, Apple App Store, or Google Play. The $10 paid for the card reader will be repaid through a setoff toward the first $10 in transaction fees. The card reader will also be available for purchase from Staples retail outlets in the U.S. 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.

Like many of its competitors, the Amazon Local Register will offer additional tools for businesses, helping them track their businesses and monitor sales growth. It will also provide register functions like adding discounts and issuing refunds.

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