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.
Is it? The sorts of brick and mortar shop Amazon is a competitor to are things like Walmart or Best Buy, or other shops that compete on price or range of stock. But these big stores already have payment systems in place, and obviously aren't the target for this. If your shop hasn't already been put out of business by Walmart, I don't see why it would be put of business by Amazon, either.
The concerning thing is that Amazon could use the data from small retailers to increase their competitiveness on products they identify as targets, so I'd say the concern is valid.
What about Amazon Fresh? https://fresh.amazon.com/ ? It seems there's no business too small or too niche for Amazon.
You: "The credit card fee is 1.75% until 2016, but Amazon can use your data against you."
Coffee shop owner: "I can add .75% to my bottom line for a year?"
You: "Yes, but Amazon can use your data against you."
Coffee shop owner: "I sign up where now?"
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.
But there's another guy who claims to have negotiated for 0.4% processing fee. I don't know how that is even remotely possible.
and most gateways charge variable rate, so those high-reward cards are higher rate than the low-reward cards. 1.5% is a pretty normal base rate that any small-ish retailer should be able to negotiate for card-present transactions
Amazon is almost any store's competitor on some level. I'd be hesitant to use a payment system from even a small or indirect competitor.