Amazon Local Register: Is it Good for Business? Credit: Amazon

Amazon's new credit card reader lets you process transactions using your smartphone or tablet – with lower processing fees than competing services. This week the online retail giant launched its new Amazon Local Register service, which lets merchants of all sizes accept credit card payments by plugging a small dongle – a plastic slab with a slot for credit cards – into their mobile device. It works a lot like competing services from Square, PayPal and other companies, but stands out since Amazon takes a lower cut of each processed transaction.

Square, currently the oldest player in the mobile credit card processing game, lets you sign up to receive a free card reader, then takes 2.75 percent of every transaction. Amazon is hoping to entice merchants to switch by taking just 1.75 percent for a limited time. Any merchant who signs up for Amazon Local Register before Oct. 31 is eligible for the deal, which will last through the end of 2015. After that, Amazon's transaction fee will level out at 2.5 percent for all sellers. You'll pay $10 up-front to sign up and receive your card reader, however.

Amazon may be willing to undercut competitors to entice more merchants to sell on its online retail platform. It might also drive sales on the company's website; money received during a transaction will be transferred to your bank account in about one business day – or you can spend it immediately on Amazon.com.

The service is compatible with iOS and Android devices, as well as Amazon's own Kindle Fire tablets and Kindle Fire phone. Once you receive your dongle, just download the Amazon Local Register app from the Apple App Store, Google Play or Amazon Appstore.  The app can also create reports to help you keep track of sales trends and volume, and it lets you customize your transactions by saving product images, tweaking tax and tip settings, and more.