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Amazon Kills Credit Card Reader And Square Competitor, 'Register'

This article is more than 8 years old.

Ahead of its much-anticipated initial public offering later this year, San Francisco financial services company Square has one less competitor to worry about.

On Friday, Amazon.com said it would be ending its credit card reader program, dubbed "Amazon Register," which debuted a little more than a year ago. The decision shutters a short-lived program that provided small and medium-sized businesses with an app and $10 credit card reader that could be plugged into a smartphone or tablet to process plastic payments.

"Effective February 1, 2016, we will discontinue Amazon Register," said an Amazon spokesperson in an email. "We periodically evaluate our offerings to ensure that we focus on delivering unique benefits. And in this case, we've decided to discontinue Amazon Register."

Amazon's retreat  shows just how low margin and tough the business of processing physical cards can be. Up against products from the likes of PayPal , Intuit and Square, Amazon Register launched with the promise of lower fees, which for some customers was a full percentage point less than Square's rate of 2.75% per swiped transaction.

Still that did not seem enough to attract merchants, who may have been worried of working with a large retailer like Amazon. In the past, third-party sellers and small businesses have expressed plenty of caution in partnering or sharing data with Amazon, whose quest to sell anything and everything often puts it in direct competition with smaller companies that it is trying to service.

The end of Register also comes on a day when the retail giant said it would close its Groupon -like, daily deals site, "Amazon Local" in a move that were first reported by Seattle-based technology blog Geekwire. Earlier this month, the company also shuttered "Amazon Destinations," an effort to sell close-to-home vacations within driving distance of customers.

Just over two weeks ago, Square announced it was seeking to raise $275 million, and possibly more, in an IPO that is expected to happen later this year. Through its own mobile credit card readers, the company said it processed about $23.8 billion worth of payment volume in 2014. It has already processed about $15.9 billion in payment volume in the first half of this year.

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