Groupon eyes Square with national mobile payments launch
The Groupon Payments service was previously only available to Groupon merchants in the San Francisco Bay Area. The expansion is key if its to keep up with market leader Square.
Groupon Payments, the daily-deals provider's answer to Square, is going nationwide.
The company announced on its blog yesterday that its merchants across the U.S. will now be able to sign up for Groupon Payments. Upon doing so, they'll be able to accept major credit cards by simply popping the Groupon card swipe accessory into an iPhone or iPod Touch and installing the associated iOS app. According to Groupon, payments processed through its service are deposited directly into merchant accounts overnight.
Groupon Payments users might find cheaper rates than they would with Square. The latter takes a flat 2.75 percent fee on all transactions. Groupon, on the other hand, charges 1.8 percent for Visa, MasterCard, and Discover. American Express costs 3 percent.
It's clear why Groupon wants to get into the mobile-payments space. Earlier this week, Square, the leader in that market, announced that it had raised $200 million in a Series D round of funding. The company is now processing $8 billion in transactions each year, and has a valuation of $2.5 billion.
Groupon, meanwhile, has faced some trouble as of late as investors seem bearish on its chances of success. Since the beginning of the year, the company's shares are down nearly 75 percent to $5.38. Its market capitalization -- a measure of its value -- stands at just $3.5 billion.
Groupon has been testing its payments service in the San Francisco Bay area for a while to get it ready for prime time. It appears that time has come.