Amazon.com, Inc.(NASDAQ:AMZN) recently announced the termination of “Amazon Register” its program involving credit card readers. The program was started in 2014 and the decision closed the books on a program, which offered medium and small sized businesses with credit card readers and an app. The $10 reader could be plugged into any tablet or smartphone to process plastic enabled payments.
The news has come as a big relief to Square, a financial services company operating out of San Francisco. It suffered a big scare in 2014, when Amazon launched its product. The latter's offering was similar to Square with the added benefit of lower processing fees. Amazon charged only 2.5 percent for every swipe, compared to 2.75 percent charged by Square. A promotion during the intervening period saw the rate to drop to 1.75 percent for each swipe.
The Register service is the latest addition into Amazon's long list of failed experiments. The online retailing behemoth stopped offering the plastic card reader, which is vital to the service. The site also issued a statement that businesses will not be able to process any purchase with the Register system from February 1, 2016.
The business of mobile card readers has always operated on painfully thin margins. Amazon is facing the heat from Square and PayPal too. It is believed that Amazon, through undercutting the rates of its competitors, along with conducting a lot of promotions, is losing a large amount of money due to its efforts to prop up Register. The company, despite the efforts, did not reach the huge user base required to continue the business. In its statement, Amazon claimed to periodically re-evaluate the business and make sure it continues to impart unique benefits.
Merchants were never attracted by the lure of Amazon. Cautionary tales were aplenty in the market, with the large internet behemoth having a reputation of selling anything it gets. It makes Amazon compete with much smaller companies.
Register's demise also comes during a period when Amazon announced the close of Groupon Inc (NASDAQ:GRPN), a site known for daily deals. Other closing down units include “Amazon Local” and “Amazon Destinations”. The former is a daily deals website. The aim of Amazon Destinations was to sell vacations near the home of target customers. It would recommend destinations just an easy drive away.