August 20, 2014
One of the best things to have happened to entrepreneurs in the past few years is the advent of credit card payment processing devices that not only enable small businesses to use their smartphones or tablet devices to accept credit cards, but that are also geared towards small businesses to begin with. By this I mean, when I first started my small business the only option you had was to sign on as a tiny little fish with one of the GIGANTIC credit card processing companies which meant you got the absolute worst rates, reports that were darn near impossible to read and paid several hundred dollars monthly for the privilege to use their credit card terminal (in addition to the transaction fees you paid.) Yes, this does sound like a ‘I used to walk uphill to school both ways’ type of story, but it’s true, credit card processing has come a long way and it’s made our lives, as entrepreneurs, significantly easier.
Well, there’s a new player on the scene that has, until now, been dominated by the likes of Square and Paypal Here. Last week, as you may have heard, Amazon launched their own mobile payment device, called Amazon Local Register. True to form, Amazon has entered the market with a splash and is going head-to-head with their competitors by offering rates that are the lowest around. Currently, Amazon is offering companies a transaction fee of 1.75% if they sign up by October 31 and they promise that fee will remain that low through October of 2016. This is a full percentage lower than what Square is charging while Paypal Here charges 2.7%.
Now, there are some who claim that Amazon Local Register is offering that low rate because they want to be able to mine your data and see what your customers are buying (I’m not saying I believe that – just reporting what I’ve been hearing…you can read more about that here) and there are some complaints on Amazon’s Local Register webpage that the system still might have some bugs in it, but that kind of transaction percentage, which will mean more money from every sale going directly into your pocket, is certainly eye-catching.
The one thing that small businesses will need to be careful of is that when using Amazon’s Local Register for business sales, it appears as though you can choose to either have the funds go directly into your bank account within 1 business day or you can use the funds to purchase things on Amazon. If it’s going to be the latter, you need to make sure that anything you’re purchasing on Amazon is for business purposes and not that great new fiction book you’ve been wanting to read otherwise it’s going to make your accounting an absolute nightmare.