Mobile Payments: Amazon Debuts New Credit Card Reader

Amazon Local Register, the company’s new card reader, is a black rectangular device that plugs into a merchant’s smartphone or tablet. For $10, it works with an app that tracks business transactions for merchants. Amazon offers lower processing fees with the device if a merchant signs up before the end of October, while the standard deal will remain a 2.5 percent charge, which is less than other card reader offers. The lower charge means that Amazon is likely making little profit.

Square’s card reader has been available since 2010. Meanwhile, PayPal and Verifone also offer similar devices.

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“With its low rate, the company is most likely losing money on transactions it processes, according to Colin Sebastian, an Internet analyst with Baird Equity Research,” reports The New York Times.

Amazon’s Fire also makes little revenue, but it opens the doors for users to make purchases on apps and online via the smartphone. Amazon is offering the Local Register reader with bundled hardware such as the Kindle Fire tablet and the Fire smartphone.

“Some businesses may be reticent to sign up for Amazon’s new reader, lest they hand over scores of information to the online retailer,” explains NYT. “Packaged with its new card reader, Amazon’s Local Register software will manage detailed data on a merchant’s overall business operations, including sales trends and volume.”