Amazon on Wednesday launched Local Register, a $10 credit card reader that rivals similar devices by Square and PayPal.

Amazon is making a play in small-business payment processing by launching Local Register, a credit card reader that can be attached to a smartphone or tablet.

The Seattle-based online retailer announced the $10 device Wednesday, challenging established players in the market, including Square and PayPal. Businesses that purchase Local Register and sign up for an account before Oct. 31 will pay a 1.75% fee for each payment processed until Jan. 1, 2016. Businesses that sign up after Oct. 31 will pay the standard 2.4% rate.

By comparison, Square grabs 2.75% of each payment while PayPal Here takes 2.7%. Another player in the market, Intuit's GoPayment, takes 2.4% of each payment, or 1.75% for businesses that also pay $19.95 per month. 

“We understand that every penny and every minute counts, so we want to make accepting payments so easy and inexpensive that it no longer gets in the way of a business owner doing what they love -- serving their customers and growing their business," Matt Swann, vice president of Amazon local commerce, said in a statement.

The launch of Local Register appears to have pleased investors. Amazon's shares rose 3.6% in morning trading on Wall Street, a sharp contrast from the company's stock performance so far in 2014 -- down more than 15% since the start of the year.

To the disappointment of shareholders, Amazon has focused on introducing new products and services rather than increasing profits. The company posted a net loss of $126 million in its most recent quarter.

Amazon this year has also introduced the Fire TV, a video-streaming player, and the Fire Phone, its first smartphone.

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