Amazon unveiled Local Register, a new mobile-payment service that could threaten rivals like Square and PayPal. WSJ's Scott Thurm explains on Digits.
To gain traction, Amazon is undercutting rivals with low processing fees, a potentially attractive pitch to small merchants. Amazon's initial 1.75% fee compares with Square's 2.75% and PayPal's 2.7% fees. Merchants using more traditional card processors may pay up to 3% per transaction.
Uses Amazon cloud as processing engine Are a payments provided/enabler not a "payments company" Amazon selected Sionic as 1 of their 3 launch partners (Amazon/Sionic app launching Jan 2015) Amazon Prime customers get "extra stuff" (can't disclose exactly) You can login to Ion Rewards using your Amazon ID/Password to transfer your current payment options into the app Prime customers will get special promotions Ion Rewards digitizes loyalty reward cards, no more plastic barcode cards (Kroger, CVS etc) Expected to reach 50,000 merchants between now & Q1-2015 No new training is required to the cashier, clerk, server to checkout customer using Ion Rewards app Merchant (Lowes for Example) pays Sionic a commission for bringing in the customer which they in turn take that commission to reward the customer (1%) Sionic is focusing on the lower cost faster payment methods: #1 is MyECheck which allows you to either take a pic of a blank check or manually enter your check info. Earns DOUBLE REWARDS (2%) Each checking to checking transaction costs Sionic a flat fee of 11 cents, which is paid to MyECheck #2 Sionic is partnering with a large well known bank for stored account value, when customer pays via stored account value you receive TRIPLE REWARDS (3%) Costs Sionic 5 cents per transaction 20,000+ gas stations going live with Sionic between Q1-Q2 2015 (10 cents off per gallon in addition to the rewards on purchases made inside the gas station) Bluetooth Beacon capability in Jan which enables 1 tap to authorize a gas pump when you pull up to a gas station. Hired "heavy guns" for their fraud detection/prevention program
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