The Green Sheet Online Edition
November 23, 2015 • Issue 15:11:02
Amazon bows out of card processing
Amazon Inc. deep-sixed plans to compete head-to-head with merchant acquirers. The company informed users of its Amazon Register service that it is no longer accepting new Amazon Register customers, and the mobile POS service will end Feb. 1, 2016. The online retailing giant also is shuttering ad programs that link shoppers to other online sellers, according to several published reports.
Amazon Register is a card-reading dongle that attaches to smartphones. Users paid $10 for the dongle and downloaded the supporting app for free. The market for dongle card readers is crowded. About two dozen other companies have offerings similar to Amazon Register, including Chase Paymentech Solutions, PayPal Inc., ROAM Data Inc. and Square Inc. Dee Karawadra, President and Chief Executive Officer of Memphis, Tenn.-based Impact PaySystem LLC, said the products respond to market demand. "This model is still very popular, and the market seems to grow," he noted.
The devices are frequently used by very small merchants, such as individuals selling at fairs and yard sales. An introductory deal for Amazon Register, set to expire on Jan. 1, 2016, assures users a per-transaction processing fee of just 1.75 percent. In a Nov. 1, 2015, email to Amazon Register merchants, Amazon stated its merchants can continue to use the mobile POS service until it is discontinued effective Feb. 1, 2016.
eCommerceBytes.com co-founder and Editor Ina Steiner said shedding its register product is part of a major strategy shift at Amazon. "[R]ather than enabling merchants with their ecommerce businesses, Amazon wants them to sell directly on its marketplace, where it will be responsible for all parts of the sales process," she wrote in a Nov. 2 post.
From online to brick and mortar
In a related development, Amazon opened Amazon Books, a brick-and-mortar outlet, in Seattle on Nov. 3. Amazon, a leader in the digitization of books and magazines, has been demonized for years as a slayer of brick-and-mortar bookstores. Now it appears to be trying to capitalize on the massive amounts of data it has collected over the past 20 years on shopping patterns and reader preferences to stock titles it expects will sell well in Seattle.
Amazon said Amazon Books will differ from other brick-and-mortar bookstores in key ways. For example, books will be displayed with covers facing out, instead of being tightly packed, spine-to-spine; online reviews and ratings will also be displayed; and prices will be comparable to Amazon's online prices. Amazon Books also will carry related items, like Kindle e-reader devices, Amazon said.
Amazon previously opened pop-up stores to sell Kindles and related devices during holiday periods. It also operates several college campus bookstores.
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