Amazon launches Square and Paypal competitor

Amazon launches Square and Paypal competitor

Amazon has launched a mobile payment service for physical stores. World's largest online department store is not in it for the money per say, but would like to get more information about consumer spending.

Cheaper than PayPal and Square

'Local Register' is how Amazon has called its mobile payment service and it uses a card reader attached to a consumer's smartphone or tablet. With the appropriate app, consumers would be able to pay through their credit card.

 

Amazon is hoping to lure American retailers into the new system with lower commissions than its competitors. It only charges 1.75 % while PayPal uses 2.7 % and Square asks for 2.75 %. The lower rate only applies to those that join before October, because from that moment on, it will charge 2.5 % - which is still the cheapest of the three.

 

"Amazon will not earn money through the payment transactions", according to a specialized consultant in The Wall Street Journal. According to him, Amazon is mostly interested in information about consumer spending in physical stores - especially as these still represent 90 % of all American purchases.

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