Start the conversation
It's no surprise that the companies want a piece of the mobile payment business, which is undergoing tremendous growth.
According to data compiled by Statista, the global mobile payment transaction volume is expected to have grown from $163.1 billion in 2012 to $235.4 billion in 2013. The statistics firm predicts those numbers will jump to a whopping $721 billion by 2017.
What's more, more than 90% of U.S. retail sales still take place in physical stores, according to U.S. government data.
AMZN, AAPL Aim to Capture Mobile Payment Profits
Amazon Local Register
On Aug. 13, Amazon grabbed for market share when it announced the launch of its Amazon Local Register, a mobile credit card reading device. For $10, users can purchase Local Register and plug it into the headphone jack of a smartphone, tablet, or Kindle. Via the same network that processes Amazon.com purchases, Local Register will process these mobile credit or debit swipes. Amazon believes Local Register will prove the "easiest way for small businesses to get paid."
"Payments are hard and that's one of the things that gets in the way of serving customers, especially for small businesses," Amazon vice president of local commerce Matt Swann said that day. "Payment tools need to be inexpensive, simple, and trusted to get the job done."
Apple's Pay will be available in October, and allows consumers to hold their iPhones up to a payment device to make a transaction. The iPhone is linked directly to the user's credit card account via Apple's Passbook application that it launched in 2012.
"It's a revenue opportunity. It's a business model opportunity. It's an integration point across multiple parts of their business and their partners' businesses," Gartner analyst Van L. Baker told Mashable. "There's just a lot of things that line up that says this is the right time to do this."
Both will compete against startup Square, which is led by Twitter co-founder Jack Dorsey. Square's Reader, which launched in 2010, links directly with a user's bank account and accepts payments from all major credit card companies. A reading device plugs into smartphone audio jacks or tablets.
But even though Square got the first crack at the mobile payment arena, Amazon's and Apple's entry is bad news for it. Square's already operating on a paper thin profit margin, and although it's growing fast, it's yet to turn a profit. So far in 2014, the company has lost approximately $100 million and has gone through half of the $340 million in its venture capital funding, according to The Wall Street Journal. The report went on to say that when a deal between Square and Starbucks (Nasdaq: SBUX) fell apart last year, it cost Square around $20 million.
Here's a side-by-side breakdown of the specs of each company's mobile payment offering – you'll see that Square is outmatched…