Amazon launches Local Register, aims at Square's heart

Amazon launches Local Register, aims at Square's heart

Summary: Amazon is offering the card reader for $10, and charging a 1.75 percent fee per card swipe – a full one percent lower than Square’s 2.75 fee.

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TOPICS: E-Commerce, Hardware
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Amazon took a major swipe at Square and PayPal Here on Wednesday, announcing the launch of Local Register, a card reader and mobile app combination that furthers the plight of payment startups by democratizing the space, but undercuts the aforementioned early entrants with a significantly lower price model.

Much like Square's card reader, Local Register plugs into the audio port of a smartphone or tablet – or Amazon's Kindle Fire HDX – allowing sellers and merchants to accept credit card payments.

The major difference out of the gate is the price: Amazon is offering the card reader for $10, and charging a low 1.75 percent fee per card swipe – a full one percent lower than Square’s 2.75 percent fee.

Granted, the 1.75 percent is a promotional rate for customers who sign up before October 31, but those who land the low rate get to keep it until January 1, 2016. After that the price jumps up to 2.5 percent.

The card reader is compatible with Android, iOS and Amazon's own Fire devices, but it seems as though the Internet giant is serious about leveraging its Kindle Fire HDX 8.9, offering the card reader and the tablet for a business bundle priced at $380. The key to the bundle is that users will gain access to Amazon's Mayday button, which provides round-the-clock tech support.

Amazon is also touting a bit of Big Data with the card reader/app combo. With in-app reporting, Amazon said businesses can check bottom line performance, sales trends and peak sales times, for example.

Even though Square has been on a noble mission to expand beyond its payments roots, having Amazon as a major competitor of its card reader will no doubt cause some concern throughout the San Francisco-based company. It still has a leg up on Amazon with its recently released EMV chip card reader, but it's almost guaranteed that Amazon has its own roadmap for EMV migration already in place.

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Topics: E-Commerce, Hardware

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5 comments
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  • Probably won't do as well this late in the game

    I see a few issues with this, one which was already mentioned in the article. The lower rate is only a promo, so that won't stand out too much in the long-term. But the card reader is $10? Square sends you one for free when you sign up, and you can request more via mail. You never have to actually pay for a Square card reader. Also, is it just me, or does Amazon's card reader look unnecessarily huge?

    Outside of the EMV chip thing, Square also offers Square "Cash" - which is free - for users to send money to each other. Using Square Cash has no percentage charge, is faster to transfer money to banks than PayPal has ever been, and is great for paying people back for minor things. I can't tell you the number of times I've used it to pay people back for lunch, carpooling, shared hotel stay, etc.

    I can see Amazon maybe making a dent with this in small businesses - those that actually process tons of customer cards daily. But for the non-business, daily users who just wanna use it to pay friends back for things? Probably not as good.
    quentjh
    • Ignore amazon at your peril

      Amazon are a super-competitor because they have never shown any desire to make money. In fact, I'm not sure if you add up every sent that ever went into that place and then subtracted every dime in revenue they ever made, that you'd end up in the black.

      For this reason, they are scary, indeed.

      How can you compete with someone who can scale better than you and is willing to sell everything at cost?
      x I'm tc
    • It's never late

      One thing history says it's never late in the game as the game is always changing.
      Buster Friendly
  • Platform EcoSystem

    We sold them the localregister.com platform over 15 months ago after 7 years of development. They are going to crush it as they have with scale, speed and everything that makes amazon, amazon. It helped put our Contrib, Domain Holdings and Global Ventures companies into a great position with future integration of our customers using the currency system. They will eventually integrate across all platforms quickly starting with localregister.com. Gotta love competition, makes our world great
    contrib
  • 1.75 promotional rate.

    after that it goes up to 2.5%

    Hopefully people won't be fooled.
    William.Farrel