Amazon.com, Inc. (AMZN) Getting into Payment Business With Mobile Card Reader

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Amazon.com, Inc. (NASDAQ:AMZN) has made a clear strategy of expanding into multiple business, which could yield them revenues through multiple channels. They recently launched their mobile wallet app, Amazon Wallet, in addition to their venture into the Smartphone sector through their Amazon Fire phone.

They are planning to get into the payment business by launching their newer and cheaper mobile card reader. Carl Quintanilla reported on CNBC about this and the ‘Squawk Alley’ team provided more insights into the Amazon’s new venture.

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Quintanilla said that Amazon.com, Inc. (NASDAQ:AMZN) might roll out their new mobile card reader in a few weeks to compete against the similar products like Square and PayPal.

“Our friends at 9to5 Mac with internal Staples’ documents indicate, the store is preparing to stock a new product called the Amazon Card Reader, alongside existing card readers from Square, PayPal and Staple’s own in-house brand,” Quintanilla said.

‘Squawk Alley’ Team members, Kayla Tausche, Jon Fortt and Jon Steinberg added more insights into the Amazon’s investment in the Payment business.

Kayla Tausche said that Amazon.com, Inc. (NASDAQ:AMZN) is criticized for getting into the new ventures, but she thinks that card reader kind of products are very cheap to manufacture and sell. She said that Amazon might sell this product for $9.99. Square’s card reader product costs just $5, but she feels that the catch in Square product is in the merchant fee that they charge.

She pointed out that Square charges 2.75% merchant fee for every transaction and it turns out to be very expensive for all the shop owners. She feels that the Amazon product could hit the sweet spot of the market with their cheap product without any additional merchant fee.

Jon Steinberg said that the payment business is turning out like cloud services, where all the major players strive to provide cheaper options to the consumers. He pointed out at the Apple Inc (NASDAQ:AAPL) entering payment business very recently. He added that all big companies are starting to invest in the payment and the music business.

Jon Frott pointed out that companies like Yelp Inc (NYSE:YELP) and Angie List Inc (NASDAQ:ANGI), which depend completely on ad business, should take a hint out of Amazon and need to diversify elsewhere like payments, music, etc.

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