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Groupon Enters Mobile Payments Space in U.S.

Thu, 09/20/2012 - 7:19am
Andrew Berg

Daily-deals website Groupon yesterday announced a new mobile payments service that will compete directly with other providers like Square and PayPal. 

Groupon is guaranteeing lower fees per transaction than other services. 

The Chicago-based company has been trialing the service in the San Francisco Bay Area. Groupon will allow any merchant that runs a deal with it in the United States to accept payments using the service. 

Swiped transactions can be processed via a case-based credit card reader or through an updated iOS app, which allows merchants process payments straight from iPhones, iPads and iPods, using an audio-jack accessory. The Groupon Merchants app can be downloaded for free from the App Store. 

Groupon is guaranteeing the industry's cheapest payments. MasterCard, Visa and Discover transactions will be charged a 1.8 percent fee plus 15 cents per transaction, while American Express transactions will incur a 3 percent charge plus 15 cents per transaction. 

Square currently charges its customers 2.75 percent per transaction, while PayPal has a 2.7 percent fee.  

Groupon's move into the payments space may have been forced by pressure from investors. The company’s Nov. 2011 IPO was priced at $20 but has since performed erratically, settling in at the $5 rage. 

Shares of Groupon rose 65 cents on Wednesday’s announcement to close at $5.34 but had dipped over 4 percent in early trading Thursday to $5.09. 

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