Groupon launches its new Payments platform and its “the lowest-cost option” for merchants who run a daily deal with the company.
Groupon Payments app is the latest entry in the white-hot mobile payments field. Groupon’s rate is 1.8% plus 15 cents per swiped transaction for MasterCard, Visa and Discover cards. For AMEX transaction, the rate is 3% plus 15 cents per transaction, as opposed to 7% regurarly charged by the credit company.
Groupon started the idea for POS (Point of Sale) Payments after it realized that many merchants did not know how much they are paying for transactions. The mission is “to slash the complexity and costs of accepting credit card payments” — and Groupon is planning to roll out other services aimed at simplifying life for merchants, he said.
The move by Groupon undercuts even low-cost competitors like Square. Square, which is co-funded by by Twitter’s Jack Dorsey, lets small business swipe credit cards through a tiny dongle plugged into a mobile phone. Today, Square offers two plans for businesses: pay one flat fee of $275 per month, or pay 2.75% per swipe. On the other hand, eBay’s PayPal charges 2.7% per transaction.
Groupon also opened its temporary pilot program for non-Groupon merchants extending rates of 2.2% for most cards (3% for American Express) plus 15 cents per swipe. Google’s Wallet and Microsoft all have not been able to reach for the comment.