) recently unveiled a mobile payment service, Amazon Local
Register, to help small businesses easily carry out credit and
debit card transactions through smartphones and tablets.
The users of Amazon Local Register service will have to download a
new mobile app and plug a $10 card reader provided by Amazon to
their smart device. Transactions can be traced through the mobile
app, which will work on all smart devices, including the Kindle
Although Amazon has been successfully entering different markets,
it might have to struggle to establish itself in the already
crammed yet fast-growing mobile payment arena. The move will place
the e-tailer in direct competition with other providers of similar
credit and debit card mobile device payment services,
including Twitter's (
) Square, eBay's (
) PayPal Here and Intuit's (
) GoPayment and VeriFone Systems Inc. Moreover, Amazon's entry into
the space comes five years after Square, which currently dominates
However, Amazon can have an edge over its competitors given its
popular brand name and huge customer base. Moreover, Amazon has
plans to attract retailers through its pricing strategy. It plans
to take a fee of 1.75% of each payment processed for customers who
register by Oct. 31 and 2.5% for the ones who register afterward.
The fee offered by Amazon is below Square's 2.75% of each
transaction and PayPal's 2.7%.
In addition, Amazon has been broadening its payment space with
other services including Amazon Payments, which enable customers to
shop online with their Amazon accounts on partnering websites and
is available on both personal computers and mobile devices, and
Amazon Wallet, a beta app that allows customers to store their gift
cards, rewards cards and membership cards and then redeem them
online or at a brick and mortar store.
However, the e-tailer is under a certain amount of pressure from
investors who are increasingly unimpressed with its huge
investments that continue to yield low returns because of its
aggressive pricing strategies.
Amazon currently holds a Zacks Rank #4 (Sell).
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