Amazon debuts mobile payment app, card reader for small business market

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 smartphones and tablets.

The move places the largest U.S. e-commerce retailer in competition with established mobile payment processing systems such as Square, 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.

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. The app works on most smartphones and tablets.

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, 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.

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 $19.95 monthly or 2.4 percent of each transaction without a monthly payment.