Amazon launches credit card reader for small businesses

Amazon has launched a card reader and mobile app for small businesses

Amazon has launched a card reader and mobile app for small businesses.

The online retail giant will provide the tools so businesses can offer card payments using tablet and mobile devices.

The service, called Amazon Local Register, will also provide businesses with access to Amazon’s customer support team, as well as in-app tracking tools.

The mobile app will be available on the Amazon Appstore, as well as Apple’s App Store and Google Play.

Businesses which sign up for Local Register before 31 October 2014 will receive a reduced rate of 1.75% on swiped transactions until 1 January 2016. The regular rate will be 2.5%.

Card readers cost $10, but for the moment, Local Register is only available to US businesses.

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Amazon has said businesses from clothing stores to contractors can use the new card reader.

“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 – serving their customers and growing their business," said Matt Swann, vice-president of Amazon local commerce. 

Last month, Amazon’s share price fell by 6% in after-hours trading after the firm reported a second-quarter net loss of $126m and warned that sales could slow in the current quarter.

In line with analysts’ predictions, net sales increased by 23% to $19.34bn, compared with the second quarter of 2013. However, Amazon expects third-quarter sales of between $19.7bn and $21.5bn, which means sales growth of 11% at best in the current quarter.

Amazon made an operating loss of $15m in the second quarter, compared with operating income of $79m in the second quarter of 2013 and $146m in the first quarter of 2014.

Analysts said operating income is regarded as a good measure of profitability and investors have traditionally disregarded narrow profit margins, looking instead at strong sales growth for reassurance.

In July, the payments giant PayPal announced that it would be providing online cash advances to small businesses in the UK.

The online payment platform provider has said it will offer the cash advances to existing business customers and eBay sellers from autumn 2014. PayPal will provide interest-free cash against the businesses’ future sales.

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