Amazon looks for data... at flea markets?

Amazon Local Register

Amazon's Local Register looks and works like Square, but it's a rectangle.

Amazon's newly released product for small businesses, Amazon Local Register, works just like Square  the little thing that the guy at the farmers market plugs into his iPhone to run credit cards. (Amazon’s is elongated. Call it...Rectangle.)

This is Amazon, so of course the product is a bit cheaper than the competition, with an introductory rate that’s about 35 percent less than what merchants pay Square. Even after that expires, Amazon’s rate will still be a little lower. 

The product may enjoy other advantages, says Will Hernandez, editor of the trade publication Mobile Payments Today.

"Amazon has a lot of name-brand recognition among consumers and even merchants," he says. "They’ve got some major clout." Amazon also has existing relationships with a lot of merchants — including a system that processes online payments.

Analysts aren’t sure how much money Amazon can make processing payments for artisanal soap or hand-roasted coffee, since it has to pay fees to intermediaries like Visa.  

"To process retail transactions, there's a cost to it as well," says Paula Rosenblum, managing partner at Retail Systems Research. "This just strikes me as a distraction." 

But Amazon can pull in something else it wants: data.

"It may sound almost absurd to think, ‘Well, what kind of information can you get, knowing that someone’s paying dog-walkers or flea-markets or whatever?’" says James Wester, research director for global payments at the tech-research company IDC. "But the fact of the matter is, that’s what data is about. You don’t know what the patterns are until you have all of that data."

About the author

Dan is a sustainability reporter for Marketplace.

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