Square is about to face even more competition in the mobile card reader space with the launch of Amazon’s new Local Register. Amazon’s credit card reader works in a similar way to Square, plugging into the headphone jack of mobile devices like smartphones and tablets to read card details and allow small businesses to process payments they’d usually take only in cash. Amazon is making its card reader available for $10, and it will work on iOS, Android, and Kindle Fire devices.
Amazon undercuts Square and PayPal
Amazon’s Local Register also undercuts both Square and PayPal for mobile payments, fixing a fee of 1.75 percent per swipe payment until December 31st, 2015 for those who sign-up before October 31st. Once Amazon’s special offer expires, the rate jumps to 2.5 percent, but that’s still less than the 2.75 percent charged by Square and the 2.7 percent from PayPal.
With rumors of a buyout and cash crunch at Square, Amazon’s move will only place further pressure on the company. Square has tried to expand from its mobile card reader roots into a wallet app previously, but the company replaced it earlier this year with a similar mobile payments app after the original didn’t take off. Square is also reportedly canceling plans to make its own credit card.