Etsy announced Thursday (Oct. 23) that is had launched a mobile card reader that combines a merchant's online and offline business — a move that has the potential to fragment the virtual payment space.
Etsy's new mobile payment offering could be the start of a trend for e-commerce sites wanting to create similar products for customers, which would open up new options in the virtual payment space and potentially drive business away from third-party mobile payment service providers. Etsy's reader also offers an opportunity to drive a new customer base to an Etsy merchant because all transactions offer a digital receipt that link customers back to the seller's virtual shop.
The e-commerce site's announcement comes on the same day Square announced the launch of its Square App Marketplace, a tool designed to make using third-party integration of other management tools more seamless for Square sellers. Etsy's card reader will also help merchants track inventory and sales in one place and could be a prime competitor against Square. Similar to Square, Etsy's card reader will have a 2.75 percent fee, but it would create a marketplace of data for Etsy merchants under one platform.
According to Business Insider: "Etsy says that 35 percent of its shop owners sell their goods at craft fairs or flea markets, as well as online, so this new device will help them better connect their retail experiences."
Etsy's introduction of its mobile payment dongle follows Square, PayPal, Intuit and Amazon. Amazon announced its own version in August.