Amazon takes on Square with Local Register card reader

The online retailer introduces a card reader that could help it learn more about consumer shopping habits in stores.

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Amazon Local Register at work. Amazon

Amazon on Wednesday unveiled a new mobile card reader, pushing the online retailer deeper into payment services and up against the likes of Square and eBay's PayPal.

The new service, called Local Register, will allow businesses to swipe credit and debit cards using their mobile devices along with the reader and a mobile app.

The effort moves Amazon into the fast-growing mobile card-reader space, where several companies are already competing, and pits it against long-time card-reader companies such as Verifone. The new service, which comes after Amazon launched a mobile wallet app last month, should also provide the company with helpful data on how consumers shop offline.

The initiative illustrates that Amazon is showing no signs of slowing its aggressive expansion plans, despite that work resulting in some quarterly losses. The company has been spending on original content for its Prime streaming-video service, and this year it introduced a new smartphone, the Fire Phone, and a set-top box, Fire TV.

Local Register includes a card reader, which became available Wednesday for free two-day shipping on Amazon.com, as well as a mobile app available in the Amazon Appstore, Apple App Store, and Google Play. Starting next Tuesday, the card reader will also be sold at Staples stores. The card reader costs $10, but each customer's first $10 in transaction fees will be credited back to their account -- allowing customers to recoup that cost.

The Local Register announcement comes a few weeks after internal Staples documents were published, showing that Amazon was working on a card reader.

Users who sign up for Local Register before October 31 will receive a promotional rate of 1.75 percent per card swipe until January 1, 2016. Those who sign up after that date will pay 2.5 percent on all transactions. In comparison, PayPal Here's service charges 2.7 percent per swipe and Square charges 2.75 percent per swipe. The card readers for both Square and PayPal Here are free.

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The Local Register card reader. Amazon

Amazon's continued move into payment services is just one of many projects the online retailer is pursuing to capture new customers and build around its core Amazon.com site. In addition to its new hardware launches, the company last month vowed to spend $2 billion in India to quickly grow in the country and fend off local competitors.

Although it's growing revenue at a rapid pace, the firm often has been spending more than it's bringing in, resulting in Amazon posting a wider-than-expected quarterly loss in July, which drove down the company's stock. An even bigger operating loss, as much as $810 million, is predicted for the current quarter.

 

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