Groupon Is Testing A New Service While It Joins The Mobile Payment Battlefield
Groupon Website
The daily deals company, Groupon is testing a new payment system which will put it in direct competition with PayPal and Square.
Groupon has started testing a new mobile credit card reader, while it encroaches on a domain created by Square that Paypal has also entered. However, the company has set itself apart, with a few tweaks.
Groupon’s payment platform will charge transaction fees at a rate of 1.8%, together with a 15 cent transaction fee. At this rate, Groupon will be charging less than Paypal’s 2.7% charge or Square’s 2.75% fee; however, its competitors don’t charge an extra fee for each transaction.
According to VentureBeat, the firm will be outdoing its competitors by also giving away a free iPod Touch along with a card reader to merchants – currently it’s competitors only give out readers.
According to a Reuters report, Groupon will also be different than its competitors with how its reader will work – the reader is a case that can be wrapped around a phone, while its rivals, use readers that connect to mobile phones through the headphone jack only.
The new bill payment system was reported first by VentureBeat, when they said they were forwarded an email by a company contacted by Groupon to use the new service.
VentureBeat noted that the new Groupon reader, which specializes in daily deals, will save merchants money when high-priced transactions are involved, because of the lower fees. However, for transactions of smaller amounts, its competitors will be more economical from a business sense.
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Posted by Mark Bastian
on Jun 1 2012. Filed under Business.
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