Amazons new mobile card reader waltzes onto Square and PayPals dance floor

Amazon logoAmazon just announced its new Local Register service, a mobile card reader and app that allows merchants to swipe cards and take payments without a traditional card reader. The service is akin to those from Square and PayPal, which both use a physical card reader that plugs into a phone or tablet's headphone jack and lets customers swipe magnetic stripe cards.

As Amazon's done many times before with books, tablets (not phones), and hosting services, among other things, the company is dramatically undercutting the incumbent companies right out of the box. Amazon's card reader only costs $10, and the company has promised that customers who register for the service before October 31 will only be charged 1.75 percent on all transaction fees made through the swipe reader until January 1, 2016. Outside of that deal, merchants using Amazon Local Register are charged 2.5 percent for each swiped transaction and 2.75 percent for all manually keyed-in purchases.

Amazons new mobile card reader waltzes onto Square and PayPals dance floor

That's compared to Square and PayPal, which charge 2.75 and 2.7 percent, respectively, on swiped transactions. Both competitors charge 3.5 percent + $0.15 for manually keyed transactions. Square and PayPal both offer their card readers for free when a customer registers with them, but the true cost of the readers is in the transaction fees. Amazon, for its part, says the first $10 in transaction fees will be credited back to the customer to make up for the cost of the swipe device.

A Square spokesperson told Ars in an e-mail, We've long been focused on building a complete register service for local businesses. This reinforces our mission and shows the demand for all of our services.

PayPal, too, said it was undeterred by the competition. "Payments isnt just about the swipe, its the experience, and PayPal has always strived to bring retailers new and better experiences for them and their customers." The company added, in an apparent jab at Amazon's online storefront, that "PayPal is committed to enabling merchant growth and not competing with them."

One concern about Amazon's foray into the mobile payments space is that the magnetic stripe card reader is on its way out. On October 15, 2015, most major credit card companies will shift liability for card fraud to the merchant if the merchant is not equipped with an EMV reader, which works with chip-based credit cards. Square announced its own EMV reader earlier this summer, but other companies have been slow to jump on the bandwagon for transactions in the US. (PayPal, too, has an EMV reader, but it's marketed to a European customer base.)

An Amazon spokesperson told Ars, This card reader does not have EMV capability. We are looking forward to getting customer feedback and will continue to monitor industry requirements to ensure we are meeting those needs and creating solutions that help our customers.

Thankfully, however, it seems that Amazon's local register service will have a strict wall between it and other Amazon products and services. When asked if Amazon would use the payment information it gathers to augment suggested products on its online marketplace, the spokesperson told Ars, All data from Amazon Local Register customers is securely protected, it will not be used for any purpose other than fraud protection and risk management for Amazon Local Register.

Source: Ars Technica

Tags: Amazon

Add comment

Your name:
Sign in with:
Your comment:

Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party

Last news

Sales of new models way below those of 2017 generation
The new Windows 10 browser will run on the Chromium engine
Google will shut the service down in April of 2019 instead of August as initially planned
The regular S10 will sport a 6.1-inch panel with the same front-facing camera design
The smartphone has a 6.4-inch Full HD+ (2340 x 1080 pixel) Infinity-O display
Google Play Services will deprecate the aging OS in newer releases
Apple might be looking to trial the feature on the iPad before iPhone
Toshiba, which released the worlds first 14TB nearline 3.5-inch and 26.1mm-height HDDs with 9-disk
The Samsung Galaxy A5 (2017) Review
The evolution of the successful smartphone, now with a waterproof body and USB Type-C
February 7, 2017 /
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /

News Archive



Do you use microSD card with your phone?
or leave your own version in comments (11)