
Amazon Local Register - dkyc
http://localregister.amazon.com
======
jnardiello
It's a trap. You, owner of a shop, don't do this.

Amazon will first analyze all your sales data, they will than attach reviews
to your shop and finally they will oblige you to play by their rules or die
(banned or killed by bad reviews) and either way they will grow thanks to your
hard work.

I'm not joking, this is exactly what they have done (and keep doing) with
"partners". Amazon is all but transparent and it has been growing like crazy
during the last 6-8 years thanks to this exact strategy. Online is not enough
anymore, they need to conquer local stores as well. The empire strikes back.

~~~
antr
I get your comment and agree with it, but... It's funny how us (the
HN/startup/pro disruptive audience) is very pro change (let's get rid off the
middle man because we can create software that can do this cheaper and more
efficient) and now we are 'rooting' for the brick and mortar business. There
is a sociological take away somewhere here.

~~~
macNchz
While I'm for technological progress, I prefer to live in an environment where
small entrepreneurs can thrive, which requires me to be skeptical when a
giant, borderline-monopolistic company comes along with 'new technology'
that's true purpose appears to be to subvert small business owners and take
their customers.

~~~
res0nat0r
Wasn't Amazon exactly this for many years?

~~~
XorNot
You don't get to be the underdog forever. There was a very long period there
where people hadn't realized that Apple wasn't the struggling underdog vs.
Microsoft anymore as well.

Monopolies are bad, and since all the people on HN _are_ the small business
owner (or want to be soon), making people aware of what's going to happen is
kind of important.

It's also not new: there are players trying to do this type of thing in every
industry. You even see it in medicine.

------
BrentOzar
Think of Amazon's role as an online merchant: they've built a 3rd party
merchant system where other folks can use Amazon's retail and distribution.
Then, they gathered centralized data of what sells, at what prices. They
stepped in and started carrying more profitable items themselves.

Now, look at their role here: if this takes off, they'll have data on what
merchants are selling, for how much, and to whom. These are items that Amazon
wouldn't normally get sales data on because people choose local vendors
instead.

If Amazon wanted to start pushing more into local markets (or different kinds
of products), they can make a fortune off this data, and that's why they can
afford to undercut companies like Square. It's a long term play.

~~~
what_ever
What makes you think they are not buying this data already from credit card
companies?

~~~
dminor
Credit card companies only know where you are shopping and how much you spend.
This gives Amazon product level data.

~~~
phreanix
Precisely. This is deep in the trenches data.

Amazon will gain by knowing what products sell most at what time of the week.
It will allow predict where to roll out certain services. One day delivery?
Done.

------
bambax
This sounds a little like a joke.

Amazon is the biggest competitor brick-and-mortar shops have ever seen; why
would shops want to give that kind of information to Amazon, so that it knows
in real time what people are buying outside of itself???

A coffeeshop, maybe, but for any other kind of business it sounds crazy.

~~~
dminor
1.75% is a huge discount.

~~~
will_brown
1.75% may be competitive and better than rates of some merchants receive;
however, I had a negotiated rate of .4% for one of my businesses.

One of the problems with the entire industry is misinformation, unlevel
playing field (inability for your average merchant to negotiate the best
rates), and the unscrupulous nature of the sales tactics of the merchant
services themselves.

~~~
pm90
If you don't mind, could you please share how you got such an amazing rate?
Were you negotiating on behalf of a huge corporation? Had a lot of sales? Gave
them other business?

~~~
will_brown
In the scheme of things it was probably a combination of many things. I am a
lawyer; the account was for the law firm (not a large corporation); on the
scale of things I would not say a lot of sales but the sale price per
transaction was ~$150-$1500; I think above all being knowledgeable about the
competition and the time/willingness to negotiate.

------
ig1
People seem to be very confused at to who the target market is here. This
isn't about bricks-and-mortar retailers switching to use Amazon as a payment
mechanism, it's about providing a payment services for the (largely) local
service vendors who sell their services via Amazon Local (Amazon's daily deal
platform).

Powering the payments system will give Amazon the data to do far more dynamic
pricing (something which they have a lot of expertise in) for their vendors on
Amazon Local which is a win for both the vendors and Amazon.

------
hemancuso
The rate at which Amazon is rolling out products is nothing short of dizzying.
Reminds me of Google before Larry came back and retook the reigns. Inevitably
they will come to a point where they start shutting down a subset of their
enormous product line. It was one thing to have google wave or reader dropped,
but when amazon kills some of these lines it'll affect people in real ways.
And it will happen.

Here is for hoping they eventually focus on making their products better
instead of constantly making new ones. Even look at AWS. I would struggle to
name 80% of the services under that umbrella in under a minute.

~~~
nemesisj
The difference between the Google scenario and Amazon is that from what I can
see, Amazon makes money on almost all of the products it's rolling out vs.
Google not really directly making money out of most of its products.

~~~
djrogers
If Amazon made money off 'almost all' of the products it's rolling out, it
wouldn't be posting record losses every quarter and attributing it to those
money-losing products.

~~~
res0nat0r
They are "losing money" because they keep reinvesting all of their profits to
facilitate all of these new products they keep turning out, and the market
doesn't like it.

~~~
elsewhen
$150B market cap. 800%+ cumulative gain over last ten years. I think the
market is liking Amazon's strategy thus far.

------
Igglyboo
Can someone explain why manually keyed transactions cost more than swipes? I'm
thinking there's more risk involved with those or something along those lines.

~~~
qeorge
In addition to the visible data (the card number, the expiration, and the
CVV), there is other information encoded on the stripe that you cannot see
(its called Track 2 data).

A swiped transaction will include the Track 2 data, but a keyed one will not.
The Track 2 data proves that a physical card was present, which carries a far
lower risk of fraud, and thus grants a lower processing rate.

Notably, in the recent Target breach, the Track 2 data was stolen as well.
This means the thieves could print up real, swipeable cards.

~~~
alexchamberlain
Or it proves the card was cloned?

------
rb2k_
I'm interested to see how the "manufactured spent / churning" crowd will use
this. There are credit cards with 2% (fidelity amex) or 2.2% (barlays arrival
plus) cashback out there.

Having a 1.75% fee on this will probably have some of them experiment :)

I'm sure Amazon will shut that down, but I'd love to see how much spent people
can run up before that happens.

~~~
_mayo
Wouldn't that be considered fraud? Since you'd be defrauding Amex (genuinely
curious).

~~~
rb2k_
Amex still gets their swiping fee from Amazon, I don't think they care
particularly much. I would assume Amazon just swallows the possible loss.
(hence: introductory rate)

------
nicholassmith
Wow, talk about doing a deal with the devil. Amazon will just apply their
standard rule book to the situation and choke the market, and use the data to
make it easier to determine what markets are worth investing in for hyperlocal
sales tools.

It honestly seems like no good can come of this, it looks like a wonderful
tool, but the risks? Eeesh.

------
gventures
We sold them the localregister.com platform over 12 months ago after 7 years
of development. They are going to crush it as they have with scale, speed and
everything that makes amazon, amazon. It helped put our Contrib, Domain
Holdings and Global Ventures companies into a great position with future
integration of our customers using the currency movement system. They will
eventually integrate across all platforms quickly starting with
localregister.com. Gotta love competition, makes our world great

------
jobu
As a consumer, I'm hoping this makes it easier to find local services. There
are a number of options, but none are great.

Angie's List has mediocre search and an awkward interface. Craigslist can be
great, but it's more often wading through a cesspool of spam and shady
companies to find the few decent ones. Yelp seems to have pretty good reviews
for restaurants, but not much else.

------
MadManE
I think it's very interesting that the Amazon phone is not one of the
supported devices for this.

~~~
bentcorner
Although not unsurprising. Once corporations get large enough you get this
sort of desynchronization. Maintaining product development secrecy while also
ensuring internal teams have aligned goals can be difficult.

~~~
MadManE
Very true. I think it just highlights some of the cracks in their armor, so to
speak.

------
hullo
Interesting to consider in tandem with AmazonSupply - a much bigger play for
businesses, and one you hear very very little about. You can (and I'm sure
they'd prefer that you do) use your Amazon Local Register proceeds to buy most
of what you need to run your business. (Leaving aside restaurants/cafes –
outside of AmazonFresh delivery markets anyway.)

[http://www.amazonsupply.com/](http://www.amazonsupply.com/)

Forbes had a pretty extensive look a couple months back, the only big public
airing it's gotten -
[http://www.forbes.com/sites/clareoconnor/2014/05/07/amazons-...](http://www.forbes.com/sites/clareoconnor/2014/05/07/amazons-
wholesale-slaughter-jeff-bezos-8-trillion-b2b-bet/)

------
aembleton
Would be cool if they supported chip and pin and paypass.

~~~
Calcite
I wonder if these kind of initiatives slow the adoption of chip and pin credit
cards in the US. If Amazon is willing to lower the fees for swipes, pin
entered transactions could be even lower.

~~~
Crito
I think that one of the problems for chip and pin adoption in the US is that
there isn't a compelling reason for US consumers to desire it.

Credit card fraud might be a pain-point for merchants, but it simply is not
for consumers. On the rare occasion that somebody makes a fraudulent purchase
on my credit card, my credit card company flags the transaction. In the
exceptionally rare case that this fails, I just call my credit card company
and tell them that the transaction was fraudulent. Takes no more than 5
minutes, and I can count the number of times I've had to do it in the past 10
years on one hand.

Why then would I want the hassle of punching in a PIN? I'm a consumer, not a
merchant. I don't care about what benefits the merchant gets out of it.

------
guiambros
This is not (only) about putting local retailers out of business; it's about
conquering consumer's wallet. In fact it'd be better for them if (most) of
Amazon Local users do not go out of business.

Having access to consumer spend outside their platform would give Amazon an
incredible leverage. They'd be able to understand where else you're spending
your money, which would allow all sorts of revenue streams: up-selling, cross-
selling, Amazon Deals, advertising revenue, selling the raw data to data
management platforms (e.g., BluaKai).

They already do something similar with Amazon Payments, but it's mostly for
online merchants. This can go much further, even to industries that they have
no interest in entering. If you're paying a plumber or a painter, you may be
interested in decoration. If you're buying a bicycle, you may need a helmet.
Buy some baby clothes, and you may be expecting, and the perfect target for
Amazon Mom (I hate this name; why not Amazon Baby, or Amazon Parents?).

And let's not forget about the revenue coming from selling your data and your
cookies, which they already do with advertising partners. While banks and card
issuers have been doing this for decades, they are typically clueless about
how to reach to consumers other than via direct mail, or co-branded email
catalogs. And matching PII and databases is something that the FTC doesn't
like much.

It's brilliant move for them.

------
chrisan
Does anyone know the true bottom to transaction fees? Are they taking a loss
at 1.75% to acquire user base?

~~~
PeterisP
Large volume can get costs of infrastructure per transaction absurdly low; the
true floor is the interchange rate that you pay to the card issuer; it depends
on type of card but it can be ~1% for many of them. American express is much
higher, taking amex at 1.75% is definitely a loss.

~~~
ddispaltro
I've always wondered what kind of deal Costco did with American Express to
make it the only accepted credit card. It's probably membership + exclusivity
that allows AMEX to have much lower fraud and therefore pass on the savings to
Costco.

------
tomasien
1.75% limited of time offer makes me want to vomit. The one thing I like about
Square is at least they're not like other CC processors that make the careers
HIDING fees from their merchants. Now Amazon is coming out the gate doing
this. Many of us are fighting these fees online - even the CC processors like
Stripe are at least straightforward with their fees even if they're forced to
make them higher than they'd like - but it looks like for in person swipes
we're stuck with the status quo.

~~~
twistedpair
> 1.75% limited of time offer makes me want to vomit.

So Amzn should offer a lower rate, free perhaps? Or are they hiding fees
somewhere else? Please you explain your aversion more.

~~~
tomasien
It's temporary - they're making it seem like it's lower than it is. They're
going to lock people in and then jack up the rate - it's classic CC processing
trick and it's BULLSHIT. Even if the real price is written somewhere, it's
still horseshit.

~~~
rvn1045
Can you name a significant number of instances where Amazon has not lowered
prices over a medium to long term period?

Amazon has consistently made things inexpensive for the consumer. Sometimes
even taking losses to ensure that customers get a lower price.

~~~
tomasien
This is my point - y'all aren't even reading what Amazon is saying! They're
LITERALLY going to raise the price to 2.5% - it's on the page! It's actually
spelled out "we are going to raise our prices".

------
aembleton
Looks like this is just for the US. Do any of you have cashback credit cards
that offer >1.75% ?

~~~
ssharp
My AMEX points work out to 1.33% and my Capital One gives 1.5% . Both are
statement credits. I haven't personally seen or been offered anything better
than Capital One for that type of incentive.

I'd guess some points/loyalty hacker has figured out how to get over 1.75%,
but it probably wouldn't be cashback through direct statement credits.

------
happywolf
In this game, one of the factors is frauds. The solution provider who is able
to keep fraud rate under control will have an advantage.

~~~
thrownaway2424
Right and those two players are google and apple. Phone-present transactions
with strong authentication and irrefutability would be far cheaper to process.
Google had been screwing the pooch for years with android wallet. They should
have owned this market years ago.

------
martinnormark
The awesome Brian Roemmele announced this on Quora two weeks ago:
[http://acceptingpayments.quora.com/Quora-News-Before-It-
Happ...](http://acceptingpayments.quora.com/Quora-News-Before-It-Happens-
Amazon-To-Compete-Head-To-Head-With-Square)

Exciting times, to see what unfolds in this payment war. Apple will certainly
get there soon:
[http://acceptingpayments.quora.com/Apple%E2%80%99s-iWallet-A...](http://acceptingpayments.quora.com/Apple%E2%80%99s-iWallet-
And-Retail-Payments-Plans-Have-Been-Exposed-In-A-New-Patent)

[http://acceptingpayments.quora.com/Confirmed-Apple-iPhone-
Ev...](http://acceptingpayments.quora.com/Confirmed-Apple-iPhone-Event-On-
September-9th-2014)

[http://acceptingpayments.quora.com/Apple-Patent-Shows-How-
Pa...](http://acceptingpayments.quora.com/Apple-Patent-Shows-How-Passbook-
Becomes-The-iWallet)

------
LukeHoersten
I can't sign up because all my amazon accounts are associated with other
Amazon payment services? Is this an AWS thing?

------
whitenoise
[1]"Make sure the microphone on your device is turned on".

I am not familiar with the card reader hardware. Why is a microphone needed
for processing a credit card swipe?

[1] - [http://localregister.amazon.com/help/201549190/swiping-a-
car...](http://localregister.amazon.com/help/201549190/swiping-a-card)

~~~
burnte
The reader inputs the data from the magstripe as audio data. The data on the
stripe can be interpreted as audio data, and it is, piped in via the
microphone part of the TRRS connector on the reader, just like your headset.

------
undertheradar2
Does anyone know how this could integrate with QuickBooks? We currently use
Quickbooks Point of Sale to run the cash register and inventory and it loads
into the QuickBooks company file each night.

I'd love to switch to something like this but I'm not really clear on how the
accounting would work.

------
skywhopper
"Pricing you can trust" rarely comes along with "LOW LOW PRICES IF YOU COMMIT
NOW!" In fact, the combination of these two concepts in one ad campaign should
double-red-flag this "opportunity".

------
hyperliner
Unfortunately, the reality is that small business and service providers will
use this service because they won't realize that the long term implications of
this Amazon move will work against them. For them, everything is short term
(swipe fees, reporting, etc.), and when we are talking about the "future them"
that is "someone else" 10 years from now.

This is really the prisoner's dilemma with thousands and thousands of
prisoners.

Alternatively, it is the frog inside the boiling water. The frog never jumps
out of the water. It just dies.

------
jessaustin
I guess maybe it saves some on TLS processing, but it's lame that I have to
click through two screens to even _start_ signing up. Especially since I'm
already signed into Amazon!

------
gambiting
What is it with swipe cards in the US? A lot of businesses in the EU don't
take them due to security risks and only accept chip-and-pin payments,yet US
parties like it's 1991?

~~~
PeterisP
The fraud liability shift for swipe cards in USA will be at the end of 2015,
so there's some time still left - but such a card reader definitely isn't
futureproof, and they'll need a new model after a year or so.

~~~
jessaustin
Can you provide any more information about this "fraud liability shift"? To
whom is fraud liability shifting? By how much is it shifting? Why would such a
shift concern Amazon?

EDIT: TIL retailers will have more liability. I suspect Amazon will find a way
to pass that on to the actual retailer. Changes like this have a way of
getting delayed in USA, as well.

~~~
icebraining
_When the liability shift happens, what will change is that if there is an
incidence of card fraud, whichever party has the lesser technology will bear
the liability. So if a merchant is still using the old system, they can still
run a transaction with a swipe and a signature. But they will be liable for
any fraudulent transactions if the customer has a chip card. And the same goes
the other way – if the merchant has a new terminal, but the bank hasn’t issued
a chip and PIN card to the customer, the bank would be liable._

[http://blogs.wsj.com/corporate-
intelligence/2014/02/06/octob...](http://blogs.wsj.com/corporate-
intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-
card/)

------
meritt
I'm guessing the product roadmap looks something like: Point of Sale ->
Inventory Management -> All of your physical inventory is also available for
purchase on Amazon.com

Brilliant.

~~~
minikomi
All of Amazon's logistics for delivery / warehousing is available to you for a
small fee..

------
mrfusion
Does this track inventory? I can't really tell.

------
knes
In a typical Scorpion manner ([http://www.feld.com/archives/2014/07/amazons-
scorpion-proble...](http://www.feld.com/archives/2014/07/amazons-scorpion-
problem.html)), they are going in for the kill.

------
ape4
Using the audio jack like Square. Isn't there a way yet to use digital like
USB yet.

~~~
robin_reala
Or alternatively Bluetooth. iZettle’s approach is a selfcontained chip+PIN
device that communicates with the app on your smartphone wirelessly. The app
then handles 3G connection.

[https://www.izettle.com/gb/card-readers](https://www.izettle.com/gb/card-
readers)

~~~
ape4
Of course, Bluetooth. It could still plug into the iPhone audio jack for
stability.

~~~
robin_reala
I’ve used these devices before. Merchant facing functionality (e.g. entering
prices) is on the phone side, customer facing functionality on the box. The
customer never needs to touch the phone.

------
sparkman55
Another card reader that plugs into the audio port.

I'd like to include one of these card readers into my own mobile app; has
anyone had success using an SDK for integration? CardFlight seems like it
would work, but it's a bit expensive...

------
mmanfrin
Congrats to (my ex coworkers) the old GoPago team for rebuilding with Amazon!

------
jseip
I don't get this. Seems like a late entry into a saturated and (at least in
Square's case) not that lucrative market. Any insight into why you would do
this?

~~~
potatolicious
Saturated but most players are unprofitable. Amazon has an infinite well of
money to not only out-price the competition but sustain a loss for long enough
that the competition might actually die.

Amazon also makes revenue off of attached services to merchants (Fulfillment
by Amazon, the webstore, etc). This is part of the reason why Square has been
trying to buy up merchant value-add companies.

------
lauradhamilton
Seems like quite a low rate. I hope they have a good team/plan for anti-fraud,
because merchant fraud is a different beast from e-tail fraud...

------
badusername
How is Amazon able to offer such low rates when the VISA/MasterCard/Amex
processing charges are themselves higher than that?

------
gventures
980% ROI in 7 years on localregister.com investment, finally I made money from
Amazon verses spending it with them.

------
fataliss
Well one more blow to Square, hope they gonna make it through 2014 but the
more I see the less I hope :/

------
bowlofpetunias
Ah, more 90's payment technology from the US. It's becoming a bit of a running
joke. (Also, extremely annoying when you live in a city with lots of American
tourists that think you can still pay that way in 2014.)

Why on earth would you still develop new services for something that is so
outdated and has been so completely broken and discredited even my 72 year old
mother knows it's unsafe?

~~~
jessaustin
Security is a process, dude. Chip'n'pin has had its issues as well. (Issues
which in some jurisdictions have been passed on to consumers. Fun!) The
marketing efforts have certainly been more successful in Europe than in USA,
however. I guess maybe we'll just have to bring more cash, or perhaps maybe
vacation in more enlightened locales.

------
chippy
Would this would turn Amazon into a bank?

~~~
brazzledazzle
They haven't gone after PayPal yet right?

------
mk00
Goodnight square.

------
byandyphillips
Did a 14 year old design this page? I thought Amazon had talented people
working for them.

------
gventures
LocalRegister.com to amazon was a great transaction for our team at Domain
Holdings and Global Ventures. We are glad we can finally analyze this
transaction and show others how key your url asset is and the potential
technology and business models still to come for the domain channel.. Check
out Contrib or BidTellect, two other up and coming platforms in good hands
with big announcements soon.

------
usaphp
They did not even bother to create some unique design of a landing page [1],
just copied it from SquareUp [2] -> PayPal [3] pages:

1\. [http://localregister.amazon.com/](http://localregister.amazon.com/)

2\. [https://squareup.com/](https://squareup.com/)

3\. [https://www.paypal.com/webapps/mpp/credit-card-
reader](https://www.paypal.com/webapps/mpp/credit-card-reader)

~~~
bdcravens
They're not that similar, aside from common UI elements seen all over the web,
and showing the device and app. Honestly, the Square page looks like a typical
theme you can buy on ThemeForest for less than $20

