Amazon is getting involved in the card reader business, pairing smartphones with a mobile app and their very own card reader. The card reader and app will be very similar to those offered by PayPal and Square.

Amazon's new card reader program will be called Amazon Local Register and it will help small businesses and individuals accept credit cards right from their smartphones.

The new service will only be available to accept payments in the U.S. Additionally, a U.S. bank account will be required for the payment receiver to transfer funds from the Amazon Payments account to the receiver's bank account.

Amazon's entry into the card acceptance market pits them up against big players like eBay's PayPal and Square which offer similar small devices that can be attached to smartphones and tablets to accept credit and debit cards.

Amazon will try to lure customers away from Square and PayPal by offering a promotional rate of 1.75 percent per credit card swipe for customers that sign up for the service before Oct. 31. That rate will beat Square's rate of 2.75 percent per swipe and PayPal Here's rate of 2.7 percent per swipe. The promotional rate will continue until the end of 2015. After that it will go up to a flat rate of 2.5 percent. 

Square and PayPal offer free readers to new customers visiting their websites and asking for a reader. Amazon will charge $10 per reader, but will return the charge by waiving the first $10 of transaction fees.

The way these apps work is simple. Just attach the reader to your smartphone or tablet (usually in the headphone jack). Next, type in the amount you wish to charge your customer (or friend). Next, the customer swipes their card into your reader. The money is available in your payment account right away. Finally, the money will be transferred to your regular U.S. checking account usually within one business day.

Amazon's Local Register will be available for Apple devices running iOS 7, select Android phones and Amazon's own Fire Smartphone.

What do you think of Amazon's new payments service?