Amazon on Wednesday (Aug. 13) introduced its own mPOS package—to be called Amazon Local Register—and focused on the tune it knows that SMB retailers want to hear: lower merchant fees than Square and PayPal Here.
Amazon is in an awkward position, in that it is seen as competitor number one by almost all merchants, a reality that makes trusting Amazon with an ocean of customer- and store-specific data an uncomfortable retail position. But with smaller retailers–especially the one- or two-store boutiques and restaurants—the need to cut interchange and related processing costs and to have more feature-rich and easier payment options is critical.
Besides, many smaller businesses (gas stations, dry cleaners, antique shops, specialized apparel, bicycle repair, etc.) are not losing that much business to Amazon.
Amazon Local Register will start with a 1.75 percent swiped (card present) transaction fee, with two limits. First, merchants must register for the service by Oct. 31, 2014. Second, that rate is only good through Jan. 1, 2016. Amazon said that that rate was comparable (as of the end of June) with a 2.75 percent rate for Square and a 2.7 percent rate for PayPal Here. For manually keyed transactions (card not present), Amazon is offering a flat 2.75 percent fee, compared with Square and PayPal, which both charge 3.5 percent plus 15 cents/transaction.
The new Amazon offering also requires a $10 secure card reader, but Amazon is offering a $10 processing fee credit, so it’s essentially a free reader for merchants who sign up. As of Aug. 19, Staples will also be selling the Amazon card reader. It’s not clear if the $10 credit applies if the card swipe is purchased from Staples.
The system works with several iPhones (4, 4s, 5, 5c and 5s) and three Samsung Galaxy models (S3, S4 and S5). It also supports four tablets: two Kindle Fire HDs (HDX 7-inch and 8.9-inch), the iPad and the iPad Mini.