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Report: Amazon taking on Square, PayPal Here with m-payments reader

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Amazon is reportedly working on a mobile payments reader that would pit the digital commerce giant against services like Square and PayPal Here.

Citing both a tipster and an industry source, TechCrunch reports Amazon is pitching the m-commerce product to smaller retail chains, promising card processing fees as low as 1.9 percent. In comparison, Square offers merchants the choice between a 2.75 percent per-transaction fee or a flat $275 monthly charge, with no processing fee or additional costs, while PayPal Here charges businesses a flat rate of 2.7 percent per credit card or PayPal transaction--the new GrouponPayments, unveiled earlier this month, claims 1.8 percent plus $0.15 of each MasterCard, Visa and Discover transaction, and 3 percent/$0.15 of each American Express transaction.

Although an Amazon spokesperson declined to comment on the TechCrunch report, a mobile payments offering does appear to fit within the company's business model. Its Amazon Payments platform enables checkout and payments processing services for third-party sellers, and earlier this week, the company launched Amazon Lending, which supplies loans to retail partners who offer products via the Amazon platform.

With Walmart and Target stores no longer selling Amazon's Kindle e-readers and tablets, some onlookers have also speculated Amazon may open its own brick-and-mortar locations where shoppers can sample and purchase Kindle devices and other products. A proprietary mobile payments platform would enable Amazon to roll out in-store transaction services independent of traditional point-of-sale service providers.

Both Square and PayPal Here present formidable challenges, however. As of June 2012, more than 2 million businesses and individuals across the U.S. are using the Square service, up from 1 million just six months earlier--this month, the startup said it is now processing more than $8 billion in payments on an annualized basis, compared to $1 billion just a year ago. In addition, more than 300,000 merchants in the U.S. and Hong Kong have signed up for PayPal Here since the service launched this past March, with PayPal on pace to handle a combined $10 billion in payment transactions this year across all of its mobile initiatives.

For more:
- read this TechCrunch article

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