Amazon offers mobile payment system

  • Associated Press
  • Wednesday, August 13, 2014 3:35pm
  • Business

NEW YORK — Amazon is taking direct aim at mobile payment systems such as Square by introducing the Amazon Local Register, a credit-card processing device and mobile app designed to help small business owners accept payments through their smartphones and tablets.

The move places the largest U.S. e-commerce retailer in competition with Square and other established mobile payment processing systems such as PayPal Here and Intuit’s GoPayment.

Amazon’s technology includes a card reader that attaches to a smartphone, Kindle or tablet. The reader processes credit or debit card payments via a secure Amazon network, the same one that processes Amazon.com purchases. The service is designed to serve on-the-go small business owners who might otherwise only accept cash or checks, including massage therapists, food truck operators and artists who sell their work at outdoor fairs.

Small businesses can start using Local Register by creating an account on http://localregister.amazon.com. Businesses must buy Amazon’s card reader for $10, and download the free mobile app from the Amazon app store, the Apple app store or Google Play. The app works on most smartphones and tablets, including the Kindle Fire.

Similar to Amazon’s strategy in many of its businesses, the company aims to compete on price in the mobile payment arena. For customers who sign up for the service by Oct. 31, Amazon will take as its fee 1.75 percent of each payment processed, or each “swipe” of the card, a special rate that will last until Jan. 1, 2016. For people who sign up after Oct. 31, Amazon will take a service fee of 2.5 percent of each payment processed.

The first $10 in transaction fees will be credited back to the customer, essentially paying for the card reader.

That’s below most of its competitors’ rates. Square takes a fee of 2.75 percent of each transaction. PayPal Here takes 2.7 percent of each transaction and Intuit’s GoPayment rates start at 1.75 percent per transaction if businesses pay a $19.95 monthly rate or 2.4 percent of each transaction without a monthly payment.

“I’ve actually heard some business owners say the only thing that would make them change (point of sale) systems is cost savings,” said Matt Swann, vice president of local commerce for Amazon.

“Payments are hard and that’s one of the things that gets in the way of serving customers, especially for small businesses,” Swann said. “Payment tools need to be inexpensive, simple and trusted to get the job done.”

Amazon is entering the mobile payment space as the industry continues its rapid growth. IDC estimates that mobile payments could top a trillion dollars globally within the next five years. That includes all forms of mobile payments, such as items purchased online via a phone or tablet, fund transfers and items bought using a mobile gadget as a payment-accepting device.

It’s difficult to isolate the exact portion of that market represented by point-of-sale mobile commerce, since the biggest player, Square, is private and doesn’t divulge sales. Also, PayPal doesn’t break out specific revenue from its Here product.

Baird Equity analyst Colin Sebastian said Amazon’s move was partly expected since the company bought mobile payment company GoPago in 2013.

“The announcement suggests the lines between commerce and payment platforms continue to blur, and we still anticipate other large technology players (like Google and Apple) to expand their own existing payment initiatives, including in-store point-of-sale services.”

Local Register is part of a slew of new products and services that Seattle-based Amazon has introduced this year. The company’s Fire smartphone debuted this month. In April, it began selling the Fire TV, a media streaming device. Meanwhile, Amazon is expanding its same-day delivery service and offering grocery delivery and video and music streaming for its Prime loyalty club members.

Investors have largely given Amazon a pass on profit as it focuses on spending the money it makes to grow and expand into new areas. But there are some signs patience may be waning. The company’s most recent quarterly report in July showed a deeper-than-expected second quarter loss despite surging revenue. Since then, the company’s stock has fallen about 11 percent.

Amazon has been expanding into the payment space with other products: Amazon payments, which lets users with stored credit card or banking information on the Amazon site use their Amazon login to pay at sites other than Amazon. And Amazon Wallet, a beta app that lets users store gift cards, loyalty and rewards cards and membership cards and redeem them in store or online.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.