Groupon’s fees are significantly lower than what credit card companies charge, whose fees range between two percent and four percent. Groupon Payments services are available in the latest version of the Groupon Merchants app, making it easy for existing merchants to enroll. The program was piloted in the San Francisco Bay Area and is now available to all Groupon merchants in the United States. The fee for American Express transactions will be three percent plus 15 cents. Groupon will charge merchants 1.8 percent plus 15 cents per transactional swipe from MasterCard, Visa and Discover cards. Since these small merchants are also the primary group interested in mobile POS, it makes sense for Groupon to invest in a business where it already has relationships with large quantities of potential customers. Groupon’s daily deals business works mostly with small, local merchants. Groupon is also reportedly planning to introduce additional merchant services. The mobile payments solution from Groupon will include an attachment for mobile devices that can be used by small and mid-sized merchants to process credit card payments. “Groupon’s brand name recognition and deep existing network of local merchants could help it stand out from competitors, provided its solution delivers on its promise,” he said. “Groupon is not known as a payments company and that there is plenty of competition already with companies like Square and Verifone,” said Scott Snyder, president and co-founder of Mobiquity, Wellesley, MA. And, just to make sure no one thinks it is not serious about payments services, the daily deals giant will charge significantly less to process each transaction than retailers currently pay credit card companies. Groupon hopes to leverage its extensive customer base of small and mid-sized retailers to offer them services enabling them to process credit card payments using a smartphone, similar to what Square, PayPal Here and others are already doing. Groupon, facing significant challenges in the daily deals space, is expanding into payments services, joining a growing list of companies enabling merchants to process credit card payments via a mobile device.
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