Will Amazon's Mobile Reader Ignite a Price War with Square?

American Banker
Monday, August 18, 2014

Amazon's launch of its new mobile card reader, Amazon Local Register, presents direct competition to mobile card processor Square as well as banks that offer their own mobile card readers, such as PNC, BBVA and Bank of America. The new Amazon reader has a low introductory swipe fee of 1.75% that will last through the end of 2015. After that period, the rate will bump up to 2.5% -- still below Square's 2.75%. Amazon is able to keep its pricing so low because many of its customers have pre-registered their bank account numbers for ACH transactions, which are less expensive than credit cards. For now, however, Square maintains an advantage in terms of the scope of its business support products, which include appointment-scheduling services, small-business lending and interactive receipts.