Why Amazon's Reason for Launching the Mobile Card Reader is Not What You Might Think

Amazon recently launched smartphone-compatible credit card readers for brick and mortar stores. However, a good bit on competition already exists in this business, including PayPal, Square and Intuit.

Contrary to the popular belief, M-POS businesses are not doing so well. Consider the following facts:

Square, the popular m-POS service provider, recorded a heavy loss of around $100 million last year. The transactions made on Square’s smartphone-compatible credit-card readers are yielding very thin margins.

Square has made a number of additions to its merchant services in order to increase its revenue beyond the 2.75% it charges for swiped card payments. A couple of months back, Square launched a credit program for small businesses called Square Capital. The program allows merchants to pay back loans from the sales they do using Square’s payment serv ...

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