Amazon is hoping to entice merchants into trying its new credit card reader with its offer of low processing rates. But how does the brand-new Amazon Local Register service stack up to Square, the oldest player in the mobile payment-processing game? The two services have a lot in common: merchants can sign up to receive a credit card reader in the mail, and be ready to accept credit card payments as soon as they plug it into their smartphone or tablet and download the corresponding application. So which service is better for business: the new Amazon Local Register app, or the time-tested Square Register app? Read on for a feature-for-feature comparison.
Amazon: What sets Amazon Local Register apart from competing services is its low processing rates. That includes a special offer for early adopters: any merchant that signs up for Amazon Local Register before Oct. 31 will be charged just 1.75 percent for each swiped transaction, through the end of 2015. After that, Amazon's transaction fee for credit and debit card payments will level out at 2.5 percent for all sellers. Meanwhile, all manually entered credit and debit payments will incur a 2.75 percent processing fee, no matter when you sign up.
Unlike other services, which give you the physical card reader for free, you will pay $10 upfront for the Amazon Local Register card reader. But Amazon will credit your first $10 in transaction fees back to your account, so you can recoup that cost.
Why are Amazon’s rates so low? The company may be willing to undercut competitors to entice more small merchants to set up shop on Amazon.com. Additionally, the service could drive sales on its site; money received via Amazon Local Register will be transferred to your bank account in about one business day — or you can blow it on Amazon.com immediately.
Square: Square charges an industry-standard rate of 2.75 percent for each swiped transaction, and 3.5 percent plus a flat 15 cents for every manual-entry credit or debit transaction. That’s about the same as many competing services, including PayPal Here. Unlike Amazon, Square will mail you a physical card reader for free upon sign-up.
Amazon: Sellers interested in Amazon’s new service shouldn’t overlook its compatibility limitations. After all, if you don’t have a compatible smartphone or tablet, you can’t even get started with Amazon Local Register, and Amazon’s reader is compatible with far fewer devices than Square’s. The list of approved devices includes the iPhone 4, 4s, 5, 5c and 5s; the iPad and iPad Mini tablets running at least iOS version 7.0; Samsung’s Galaxy S3, S4 and S5 smartphones; and Amazon’s own Fire HD and Fire HDX tablets. Amazon says its reader might work with other Android devices running at least Android version 4.0.4 and up, but that it hasn’t been “optimized” for those devices. We haven’t had a chance to test out an unapproved device, but if your phone or tablet isn’t on the list, you might want to consider a different service. It’s very likely that Amazon will expand compatibility over time, however.
Square: Compared with Amazon’s list, Square’s list of compatible devices is extensive. Instead of offering just a handful of compatible devices, Square’s list includes dozens of smartphones and tablets. The list includes most iPhone and iPad models, as well as several dozen Android devices. Like Amazon’s service, Windows and BlackBerry devices aren’t supported. Square Register also doesn’t work with Amazon’s Kindle Fire tablets.
Amazon: The first thing you’ll notice when you receive Amazon’s card reader is its size. It’s more than twice as wide as the Square compact reader, and slightly thicker as well. That means that it’s slightly less portable than Square’s reader, but the extra bulk could have a few advantages. The larger, sturdier card slot might make the physical act of swiping a card easier and more reliable. Plus, you’re less likely to misplace the bigger card reader when it’s not in use. Like Square’s reader, it plugs directly into the headphone jack of your smartphone or tablet.
Square: As its name implies, Square’s reader is small and square. The compact reader is discreet, which makes it easy to carry around. But the small size might make it slightly harder to reliably swipe a credit card through, and the tiny reader is more likely to be lost during off-hours. Square’s reader features the same plug-and-play design as Amazon’s reader: Just plug it into your phone or tablet’s headphone jack to start processing payments.
Amazon: Once you have Amazon’s credit card reader in hand, you can get started by downloading the Amazon Local Register app from the Google Play store. Signing up for the service is easy: Just type in your Amazon account credentials and provide a few details about your business, such as its name and location. You can add and remove bank accounts at any time.
The app itself is simple and easy to use. The main menu includes a number of options including the basic keypad for adding charges to a transaction, and a catalog, which lets you create a full list of available items. You can add items with a few taps, and easily edit details for each item to add a photo, or variations such as size or color. From the main menu you can also view a full list of transaction details, or check out a reports page that can generate a variety of graphs and charts to show you how your business is doing. Meanwhile, the settings page lets you tweak your tax, tip and signature settings.
Square: Square’s app provides most of the same options as Amazon’s, but it is more polished in appearance and functionality. For example, when you’re adding items to an ongoing transaction, Square Register lets you edit the quantity for each addition item; Amazon’s app forces you to add items one by one. Square’s app is also easier to navigate, with a slide-out sidebar that’s accessible from any screen.
Otherwise, its basic functionality mostly mirrors Amazon’s. For starters, sign-up is equally fast and painless. Inside the app, you can access the keypad to ring up a transaction, or view your library to add or edit items. Once an item is created, you can tap to add a photo and alternate price points for different sizes or varieties. In addition to the mobile app, you can access your Square dashboard from your desktop Web browser. The dashboard lets you see tons of information at a glance, including breakdowns of your top sales by category, and how many of your customers are new vs. returning patrons.
Conclusion: Amazon Local Register is a solid credit-card-processing application, with one standout feature: low processing rates, compared with rival services like Square Register. That could save you money on every transaction, especially if you sign up for Amazon’s special rates before they expire on Oct. 31. On the other hand, Square’s time-tested service is more polished, with better software and broader device compatibility. Weigh the pros and cons to see which is best for your business.
Originally on Business News Daily.