back to article Amazon takes swipe at PayPal, Square with card reader for mobes

Amazon has launched its own mobile payments device and app at a starting price that undercuts existing tech from Square and PayPal. Youtube Video Amazon’s “Local Register” popped up in a YouTube video and a dedicated site online before the mega etailer officially announced it. Anyone who signs up to the secure card reader by …

  1. TheFinn

    I know they're running a business, not a charity, but Amazon could do itself a lot of good in the eyes of many of the retailers it's hurt by keeping the transaction fees super-low. Call it giving something back.

    1. leon clarke

      It probably needs to pay most of those fees on to visa/mastercard, who will then pass them on to the issuer banks. The banks get so much money from card merchant fees that they feel generous enough to give people 1% cashback, and an interest free month.

      (Creating a form of payment which didn't inherently cost so much would be a good thing, but that's a Separate Issue)

      1. Buzzword

        Direct debit

        In the UK at least, PayPal can take money from your account via direct debit, thus bypassing Visa/MC and presumably not giving much to the banks either. Then they slap their whopping fees on top, which are almost pure profit.

        1. Kubla Cant Silver badge

          Re: Direct debit

          PayPal can take money from your account via direct debit

          Not from mine, they can't. A few years ago I made quite a lot of purchases on EBay, so I had to pay via PayPal, whom I in turn paid by credit card. After a few weeks I got an email from PayPal saying "You've spent over x. If you want to continue using PayPal you will have to let us suck money directly from your bank account via Direct Debit", possibly the only case I've encountered where a good customer gets a worse deal.

          Naturally I declined, and ever since then I've been unable to use PayPal for purchases. Occasionally they even refuse my credit card when they're just acting as a card handler (in the same way as WorldPay, for example).

      2. DrXym Silver badge

        "It probably needs to pay most of those fees on to visa/mastercard, who will then pass them on to the issuer banks."

        Exactly. Whatever they charge is in addition to whatever Visa / Mastercard charge Amazon when a user makes a transaction through their service.

    2. Just Enough
      Meh

      Doing what they love

      But that's not what they're doing. Apparently Amazon believes business is all about "a business owner doing what they love - serving their customers and growing their business".

      And you thought it was about making money, you cynic.

  2. Jonathan 29

    Swiper no swiping

    I happened to be in line behind a bunch of American tourists the other day trying to pay by credit card. The shop only had an EMV (chip and pin) reader, so the poor girl had to go to the back to get an old card imprinter and be taught how to use it.

    I dare say that by the time American banks have rolled out their new fangled dangled cards, the US will be the market leaders in contactless biometric secured mobile wallets, just as they were behind in mobile phone technology, but eventually bought and destroyed Europe's best known phone manufacturer.

  3. Ho Ho Hipster

    Girls grunts are the new rising intonation

    They both turn me off listening by the end of the first sentence.

  4. DrXym Silver badge

    Oh joy

    Yet another proximity payment system for phones that nobody will ever use.

    At the end of the day Google, PayPal, Amazon, Apple + world are trying to insert themselves into transactions as another layer of fees on top of what Visa, Mastercard or Amex would charge. What's the point of that for the consumer or the merchant? Why is whipping out a phone seen as a benefit when most credit cards have proximity RFIDs anyway these days?

    1. jonathanb Silver badge

      Re: Oh joy

      Merchants don't deal directly with Visa or Mastercard. At the moment your typical shop deals with someone like RBS Streamline or Barclays Merchant Services, so PayPal and Amazon are competing with them.

  5. Derichleau

    I'm reluctant to do anything more than I have to with Amazon because it's ultimately going to mean more marketing. I've already opted out of marketing e-mails with them. Then the other week they promoted the soon to be defunct Norton Antivirus - See Reg article: Symantec: Antivirus is 'DEAD' – no longer 'a moneymaker'... must have done a deal to farm it on to unsuspecting Amazon customers. Anyway, Amazon sent me an e-mail to promote Norton AV and they said that this was because I had spent over £30.

    So I'm opted out of marketing e-mails, so what do they do, just find some reason to bypass it. So I've told them that I will never place an order with them again that exceeds £27.99. And I'm submitting a complaint to the EU Commissioner's Office because I had already expressed a preference not to receive marketing e-mails and they ignored it.

    Eff them! The worst thing a company can do is take its customers for granted. Just as Mr Ratner.

  6. A K Stiles
    Facepalm

    Stripe swipe?

    Why so many companies wading in to a 'market' for swipe reading additions to had-held tech? Have they not noticed that World(-USA) shifted to chip and PIN readers 10+ years ago because <ahem>security</ahem>, and now towards "tap...tap...TAP...SLAP...jiggle, wiggle - ah there it is, no PIN, 'cos that was faster wasn't it? Securi-what now? well, it was only £20 wasn't it..."

    Or I could hand someone a bundle of used notes in exchange for some goods and nobody pays any transaction fees, well until the business go to lend it to their bank anyway!

  7. phil dude
    Meh

    ripoff...

    Anything above %0.01 is a ripoff.

    Why? No reason, I made it up.

    So where do their numbers come from...

    P.

    1. Tom 13

      Re: So where do their numbers come from...

      Somebody runs through their data, runs the cost structures, runs payment structures, and calculates the best way to make money.

      For small businesses it tends to be more back of the envelop calculations: I expect my typical purchase to be X. My processing fees are 0/.25/.50 per transaction plus 1/1.5/2/2.5% of the transaction. I expect x% charge backs, so that works out to ... +y% per item in costs.

      Back when I first did this for a large east coast (US) fannish convention, we worked it out to about 2.3% per transaction for the vendors we chose. We decided to add a 5% processing fee and pocket the difference (additional equipment was needed beyond the vendor charges and they don't want you advertising their exact fees as that constitutes privileged competitive information). And yes, we assessed the 5% on taxes collected as well because the credit card was going to charge us for processing those taxes too.

      1. DrXym Silver badge

        Re: So where do their numbers come from...

        Meanwhile Ryanair works out fees typically costs them between 15p and £1.50 and naturally slaps a £5 charge per leg per person.

  8. DesktopGuy

    Anything that helps small business improve cash-flow is great news.

    I currently use a PayPal Here swipe several times a week to hit up clients for payment on the spot.

    At a straight 1.95% charge it's currently the cheapest option out there - especially in Australia.

    If I went for a mobile credit card/EFTPOS terminal from a bank - they would charge me hundreds for the device, a monthly fee, a % + a transaction fee.

    I owned the previous triangle PayPal Here triangle device and it was a pice of steaming crap.

    It rarely worked, did not work with pin and chip, if I launched the software with headphones in it played a high pitch sound at full volume. I only used it 3 times - it simply didn't work.

    On top of that, when they first released it, any payment you received using the device was held in escrow 30 days in case of chargeback!

    1. Anonymous Coward
      Anonymous Coward

      Why would a small business help Amazon?

      Amazon is competing with them, at least if they're a retailer rather than a sandwich shop. If I owned a retail shop I wouldn't use this as it would help Amazon. You know if this is successful, Amazon will have their own card at some point that allows them to keep the whole 1.75% and cut out Visa/Mastercard. Then they'll offer people deals for using it at amazon.com. More incentive for your customers to buy online instead of at your shop, and quicker path to bankruptcy for you all because you were seduced by a short term savings.

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