The group buying program company has just announced its entry into the market.
Groupon Inc. has revealed its first steps into the mobile payments marketplace as it launched its Groupon Payments service, which allows companies to accept credit card transactions from users of the iPod Touch or iPhone.
While the system is compatible with virtually any credit card, it is concentrating on Groupon deals.
The program is also allowing other companies to use the mobile payments service as a part of pilot programs, but it is charging rates at a premium for this ability.
The mobile payments target market is small businesses that would otherwise not accept credit cards.
The aim of the new Groupon program is to help those companies to overcome the obstacle that had previously stood in their way, in the form of transaction fees or the lack of access to the technology that would be required to process credit card purchases. The service is meant to benefit those companies by allowing them to process credit card transactions through smartphones.
The program has already been tested within the San Francisco Bay Area market, and they feel that it has tremendous potential. That said, it is hardly the only company in this niche of the mobile payments marketplace. PayPal and Square are already sizeable players in this area and have been vying for dominance since they both took their first baby steps into the industry.
Equally, though, Groupon does present the unique advantage of being able to offer businesses highly rapid processing speed, as its goal is to complete transactions overnight. In comparison, other companies can take up to three days to complete their mobile payments processing.
Another advantage that it will offer is in terms of its pricing, which is notably more affordable than the competition. Square’s fee is either 275 percent per transaction or $275 per month, and Paypal’s transaction fee is 2.7 percent. On the other hand, Groupon’s mobile payments fee will be only 1.8 percent plus 15 cents per swipe. This is what is charged for the use of Visa, MasterCard, and Discover cards. American Express involves an higher fee at 3 percent plus 15 cents.
