Amazon Could Be Working On A Square Competitor

As each new mobile payment service launches, the number of suppliers offering lower transaction fees grows. The latest rumor has Amazon readying a mobile payments product that could compete with Square, Intuit GoPayment and PayPal Here, TechCrunch reports.

Amazon is said to be targeting smaller chains of retailers, a logical positioning given the value of a smart phone or tablet dongle approach for a smaller retailer.

Amazon could be offering significantly lower credit card processing fees for merchants as part of its pitch. Rumors are that Amazon could be offering a rate as low as 1.9 percent. Current offerings include fees of around 2.7 percent.

Such a move would put Amazon into the physical retailing environment in a new way, and also shows why growing competition in the payments processing business is leading to lower fees for retailers who use the services. 

A survey by the National Retail Federation in 2011 found that while only six percent of retailers said they used mobile point-of-sale devices, half of the respondents said at the time that they planned to adopt such devices over the next 18 months.