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Amazon.com Inc. on Monday refused to comment on a report that the big online retailer is preparing to launch a mobile card reader to compete with Square Inc., PayPal Inc., and dozens of other vendors.
“We can’t comment on rumors and speculation,” an Amazon.com spokesperson told Digital Transactions News by email.
But while the report, posted late Sunday by tech news service 9to5Mac, remains unconfirmed, industry observers point to several assets at Amazon that could be leveraged to help win a share of the burgeoning mobile-acceptance market. These include the company’s introduction last week of a limited mobile wallet to which merchants’ mobile transactions could be linked.
The new reader will be sold for $9.99, probably beginning next month, according to Staples Inc. documents cited by the news service. No specific launch date is available, but the documents indicate stores have been asked to hold off until Aug. 12 before posting signage promoting the new product, according to 9to5Mac. A Staples spokesperson did not respond to a request for comment.
Staples currently sells readers from at least three competing providers—PayPal, Square, and NCR Corp.—as well as its own private-label device. The Square device sells for $9.99, while the PayPal Here and Staples-branded dongles are priced at $14.99. The NCR Silver device carries a $79.99 price tag. Such card readers typically attach to smart phones and tablets to allow merchants to run card transactions and capture data.
A visit Monday to a Staples store revealed the PayPal Here device to be out-of-stock, indicating its popularity with buyers, a store associate said. Plenty of Square, NCR, and private-label readers were on the shelves. The store associate had not heard of an impending device from Amazon.
If the report proves true, Amazon will be a late entrant in a market crowded with established tech players, processors, and independent sales organizations. “If it’s just a card reader, it’s kind of a snore,” says George Peabody, a senior analyst at Glenbrook Partners, a Menlo Park, Calif.-based payments consultancy.
But Amazon could pair the new dongle with its established payments engine and its expertise in tablet computing to bolster its bid for a piece of the mobile point-of-sale market, Peabody says. “They’ve got quite a payments-processing platform,” he notes. “They appear to be putting in place more ways for that platform to be used.”
Other assets include technology licensed from mobile POS technology vendor GoPago before that company was sold late last year to Pasadena, Calif.-based mobile-technology provider DoubleBeam Inc. Ted Tekippe, DoubleBeam’s chief executive, told Digital Transactions News at the time that Amazon had also hired a number of GoPago engineers. Still, much depends on how Amazon might combine these various parts to stand out in a crowded market. “It’s not hard to have the parts,” says Peabody, “it’s how do they put them together.”
Another possible handicap could be Amazon’s status as a major e-commerce merchant. While dongles and point-of-sale apps are used almost exclusively by small, face-to-face sellers, some merchants might be put off by the potential for Amazon to use the new product to gather data on their customers. “This [fear] is real,” says Peabody. “It’s not some fantasy of media or analysts.” The new reader “could give Amazon a lot of data to look at over time,” he says.
