Amazon Local Register Mobile Payment Platform Challenges Square

Amazon, moving into the offline retail space, has introduced Local Register, a Square-like technology with an industry-low transaction rate.

Amazon Local Register

Amazon has introduced Local Register, a Square-like mobile payment technology intended to extend the tentacles of the online retailer in the world of brick and mortar—as well as flea market stalls, food trucks and other entrepreneurial retail efforts.

Amazon Local Register consists of a small piece of hardware that connects to a smartphone or tablet—it's compatible with iOS, Fire and a handful of Android devices—and an application that includes analytics for users.

The card reader costs $10, but Amazon plans to credit back the first $10 in transaction fees to each customers' account, to cancel out the cost—a model very true to Amazon's we'll-make-it-up-later style.

Also in Amazon fashion, it plans to gain traction in the market by undercutting competitors' transaction feeds.

Users who sign up before Oct. 31 will receive a promotional rate of 1.75 percent per card swipe until Jan. 1, 2016. Afterward, as it will be for those who join after Halloween, the fee is 2.5 percent.

Square, Amazon points out, charges 2.75 percent per swipe, and PayPal Here charges 2.7 percent.

There are no monthly fees, no contracts, and no fees for returns, chargebacks or international credit cards.

Amazon Local Register supports, Visa, Mastercard, Discover and American Express, and it boasts the same transaction security and customer support as Amazon's site. Plus, those who use the solution with a Kindle Fire HD X or the Amazon Fire Phone (though support for the latter will come later) can enjoy 24/7/365 support from Amazon's Mayday service.

"We understand that every penny and every minute counts, so we want to make accepting payments so easy and inexpensive that it no longer gets in the way of a business owner doing what they love," Matt Swann, vice president of Amazon Local Commerce, said in a statement.

While Amazon makes clear that business owners will be able to enjoy perks such as the ability to "quickly check bottom-line performance, sales trends, peak sales times and more," it's unclear what information Amazon—a business that's devised around and thrives on data—will be privy to.

A known motivation behind Amazon's Fire Phone, was to give the retailer insights into customer behavior beyond its Website and app.

Also unclear is whether small businesses, fighting to compete against online retailers, particularly Amazon, can be wooed by low transaction rates to do business with the so-called enemy—unless, perhaps, they see doing business with Amazon as an inevitable circle. All money that businesses make via Amazon Local Register can be deposited directly into a bank account within one business day, "or spent on within minutes," Amazon said in its statement.

The Amazon Local Register app can be downloaded from all major app stores, and the card reader is available on Amazon with free two-day shipping; after Aug. 19, it will also be available at Staples locations. To get started, business owners can visit the Amazon Local Register site.