Merchants running Amazon Local Register can access the funds from transactions within one business day, though they’ll be able to spend them within only a few minutes on Amazon.com.
As with many of Amazon’s services, lower prices for quality services are the key to Amazon’s business plan. Retailers who sign up for the service by Oct. 31 will receive a highly competitive 1.75% transaction rate until the end of 2015. Once the promotional period ends, the standard 2.5% rate will still prove to be strong competition for devices like Square, which charges 2.75% per swipe.
The device itself costs only $10 with free two-day shipping, but retailers on the system will actually be reimbursed in credit later on for the initial purchase. Like it’s competitors, it looks like Amazon will also target small businesses and micromerchants with infrequent transactions and small amounts of revenue.
Unfortunately, Amazon’s reader lacks EMV support, which may skew things in favor of Square, which announced a dongle to support the use of the international integrated circuit cards which have been established as a US standard among card brands.
In an email, an Amazon spokesperson wrote that”While this card reader does not have EMV capability, we are looking forward to getting customer feedback and will continue to monitor industry requirements to ensure we are meeting those needs and creating solutions that help our customers.”
Some analysts are still puzzled by the oversight, but others believe that it’s part of Amazon’s plan to keep the device as cheap as possible until Amazon’s reader is firmly established.
Merchants will be able to track data like peak sales times, sales trends and other reports through Amazon’s service.