Amazon's new payment system undercuts rivals Square and PayPal in price and gives Amazon crucial data on how Americans shop at physical stores. Fred Katayama reports.
Amazon is expanding its presence in the physical world. It launched a $10 credit-card reader and mobile app so food trucks, massage therapists and other small businesses can easily accept credit and debit cards. It works like this. The reader attaches to a tablet or mobile phone like those of its rivals, Square and PayPal. The app provides merchants with sales trend data. This system also gives Amazon crucial data on how people shop at those bricks-and-mortar businesses. That's where more than 90 percent of retail sales still take place. As usual, Amazon is competing on price. It's undercutting its rivals with a flat promotional fee of 1.75 percent per card swipe for those who sign up before October 31. But even those who miss that introductory offer will pay just 2.5 percent. That's at least 2-10th percentage point less than the cut at Square and PayPal. Many investors added Amazon's shares to their shopping cart in early trading, trimming the stock's loss this year of nearly 20 percent.