Amazon.com, Inc. (NASDAQ:AMZN) put on a rare display of bravery by building its market share by sacrificing short term profits. Amazon Local Register is a new card reader service plus a mobile app that allows businesses to accept payments with credit or debit cards, made directly from a mobile terminal such as a tablet or smartphone. Although the principle applied here is same as that used by Square and PayPal, Amazon’s offer distinguishes itself courtesy of lower commission fees.
For entities registering prior to October 31, the fee will be 1.75% of the transaction value. After this date, the rate will be 2.5% for all transactions and 2.75% for transactions that require manual processing on behalf of the merchant. Amazon Local Register is already available on some iPhones and iPads, and also on some Samsung phones. Next week, the Amazon mobile card readers will also be available at Staples, Inc. (NASDAQ:SPLS).
It is a brave attempt by Amazon.com, Inc. (NASDAQ:AMZN) to capture a larger market share in mobile payments, a domain wherein they have lagged behind their main competitors. The move is risky but necessary because Square, the San Francisco based payment processor, is rumored to sell to Google (GOOG) or Apple (AAPL). Square recently expanded their scope of services with Square Order, a new method to order fast-food products and beverage, Square Cash and Square Register. Square charges a fee of 2.75% per transaction and that is why Amazon hopes to attract clients with their smaller commissions.
Simultaneously, Amazon.com, Inc.(NASDAQ:AMZN) also announced that its app will have a section where merchandisers can check market trends, best sales and future “star products”. Of course, the application will be connected with the Amazon online store.
The largest e-commerce company, Amazon.com, Inc. (NASDAQ:AMZN) is a producer of electronics, furniture, toys and jewelry. Net sales rose 23% in the second semester as compared to the first, but with a net loss of $126 million. Losses were expected, but were estimated at 15 cents per share, less than the result of -23% per share. According to Amazon officials, the immense drop in profits came from the company’s recent investments.
Staples, Inc. (NASDAQ:SPLS) is a supply chain network with 2000 stores worldwide and a presence in 26 countries. They sell supplies, office machines and technology products, both in their brick-and-mortar and online stores.