Amazon.com, Inc. (AMZN)’s Local Register Will Eat Into Mobile Payment Market

Amazon.com, Inc. (NASDAQ:AMZN) is all set to take on the burgeoning market of offline payments with its latest offering, the Amazon Local Register. This is a $10 dollar card reader which can be plugged into a mobile device or tablet. It comes with a free app that allows merchants to accept both credit and debit cards. Neil Doshi, Managing Director of CRT Capital Group and Christina Warren, Mashable’s Senior Tech Analyst discusses the online retailer’s foray into the mobile checkout market with Trish Regan on Bloomberg’s Street Smart.

With the Local Register, Amazon.com, Inc. (NASDAQ:AMZN) is entering into a market in which Square and eBay Inc (NASDAQ:EBAY)’s PayPal are already established players. But Doshi said that there is a big opportunity for Amazon by undercutting competition.

“[…] They have 240 million customers. 40 % of goods on Amazon are sold by third party merchants. So the next big step for them is to move payments offline,” he added.

Amazon.com, Inc. (NASDAQ:AMZN) might win over Square by dint of its sheer volume, the latter being just a startup and might not have enough capital to compete with a giant like Amazon. Most of its customers save credit card information on the Amazon website. So, when the same card is used in an offline purchase using Local Register, Amazon.com, Inc. (NASDAQ:AMZN) might be able to use this information to suggest products related to the purchase.

Warren noted that brand factor might not really matter in selecting the method of payment process as long as it is secure.“It really doesn’t matter to the proprietor what they’re using. They want to get the best deal that they can and customers want to pay with their credit card ideally. They don’t necessarily want to pay with their Amazon account,” she explained. So, ultimately, what matters the most is if the deal is good enough for the merchant.

Disclosure: none