Groupon Payments now supports Android

As mobile becomes increasingly critical to Groupon's survival, Groupon Payments expands

Technology trends and news by Faith Merino
January 11, 2013
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Groupon continues to buckle own on the mobile front. The company announced Friday that it’s expanding Groupon Payments—its Square-like mobile payments service—to support Android.

Like Square and PayPal, Groupon Payments uses a little plastic dongle that merchants plug into their phone or tablet to start swiping credit cards. 

The payments system is built right into the Groupon Merchants app, which means a merchant can swipe a card and do a transaction while also redeeming deals and updating their analytics to note how many deals have been redeemed, what the average bill looks like, and how much has been spent altogether. For now, the Groupon Merchants app for Android does not translate over to Groupon’s Breadcrumb point-of-sale system, which allows staff members to clock in, take orders, calculate checks, and process payments all from an iPad. 

What’s particularly interesting to note about Groupon Payments, however, is that it’s positioned to be a serious competitor, charging nearly half of what Square and PayPal currently charge. Transactions using Visa, MasterCard, or Discover are charged 1.8%, plus 15 cents when swiped (2.3% plus 15 cents when keyed). And the rates apply to all merchants, regardless of whether they’ve run a Groupon deal before.

By comparison, Square charges 2.75% or a flat rate of $275 a month for businesses processing less than $200,000 a year.  PayPal charges 2.7%.

Groupon Payments also allows merchants to get paid overnight, rather than waiting the usual two or three days for payments to be deposited into an account.  

Mobile is playing a big role in Groupon’s survival. As the company’s coupons business continues to shrivel away and it’s forced to find other revenue streams to stay afloat, it’s turning to mobile to stay ahead of the game. Fully one-third of all Groupon transactions take place on a mobile device. The company tried its hand at capitalizing on impulse buying with Groupon Now for Groupon deals on-the-go, but the concept didn’t take off as expected. But Groupon CEO Andrew Mason acknowledges that mobile is critical to Groupon’s survival.

“Local commerce does not happen from behind your office desk on your desktop computer," said Mason, who spoke at the Mobile-Loco conference in San Francisco last month. "You decide if you’re hungry or you’re bored on a street corner.” 


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