Rumors have been coming in that Amazon is readying a mobile payments product that could compete with Square, Intuit GoPayment and PayPal Here. A tipster and an industry source both tell us that Amazon is going after smaller chains of retailers for the product, and could be offering significantly lower credit card processing fees for merchants. Rumors are that Amazon could be offering a rate as low as 1.9 percent. Current offerings include fees of around 2.7 percent.
It would make sense for Amazon to enter this market and transition from powering online transactions and checkout to in-store transactions. Amazon already has a payments infrastructure in place with its own PayPal competitor, Amazon Payments. Of course, it’s important to note that PayPal has much more reach and usage from independent online sites than Amazon Payments. It will also be interesting to see whether Amazon will go after smaller, individual merchants, which would play right into Square’s bread and butter.
It’s no secret that Amazon has been eying the in-store physical, retail world. The company is reportedly looking to launch a number of retail stores. A credit card processor and mobile payments device could power payments at these stores.
And the opportunity to power mobile credit card payments and point of sale for merchants is huge. As Allthingsd reported a few weeks ago, a recent survey by the National Retail Federation found that while only 6 percent of retailers said they used mobile point-of-sale devices, half of respondents said at the time that they planned to adopt such devices over the next 18 months. Further, 75 percent of U.S. merchants revealed that they want to buy a tablet over the next year.
This isn’t the first time rumors have surfaced that Amazon is looking to power payments: last year, Bloomberg reported Amazon was exploring a NFC-powered mobile payments service, but no such product has been released.
A spokesperson for the company issued us this canned response: “We do not comment on rumors or speculation.”