We’ve already talked about Groupon’s Square-like mobile payments service in the past. After a successful pilot in the San Francisco Bay Area, it’s now officially official along with a guarantee to be the lowest cost option for the company’s merchants to accept credit cards.
The service comes built into the latest version of the Groupon Merchants app for the iPhone and iPod Touch, allowing local businesses to accept all credit card payments at a lower rate than other providers. Swiping MasterCard, Visa and Discover cards costs 1.8% plus $0.15 per transaction, while doing the same with American Express costs 3% plus $0.15 per transaction. Moreover, there are no hidden costs or monthly fees.
But that’s not all – merchants will also have their credit card deposits in their bank accounts overnight, which is much faster than typical wait of two to three business days offered by most credit card processors.
Aside from Groupon merchants, those not offering deals through the popular service can also accept credit cards this way – the cost is 2.2% (3% for American Express) + $0.15 per transaction.
Groupon offers two types of credit card readers – a sturdy, case-based credit card reader suitable for high transaction volume merchants and an audio jack accessory a la Square.
The question remains whether Groupon has what it takes to tackle incumbent players. The way I see it, we’re talking about a huge market and at the moment there’s room for everyone. What do you say?