Posted 09/21/2012 at 10:34 AM
Posted 5 years ago
Groupon, the popular coupon broker, has revealed a new mobile payments system designed to give merchants the “lowest rates in today’s marketplace.” After successful testing in San Francisco (everything seems to be happening there lately), the app has been made available to merchants in the US, although there is no word on when, or if, the technology will be made available in Europe, South America and Asia.
The system is nothing ground-breaking in tech terms, but does show that confidence in mobile payments is becoming more widespread. Merchants will receive a Groupon credit card reader (for free) that attaches to an iPod, or iPod touch via the audio jack. The deal-a-day website has also introduced a credit-card reading phone case, but this will set you back a cool $100 and is not exactly the most aesthetically pleasing case on the market.
As a standalone offering, one wonders whether the mobile payments system would really take off; however, by introducing now low rates – the lowest of any payments processor on the market – Groupon could be onto a winner. According to PC World, the new rates are as follows:
MasterCard, Visa, and Discover swiped transactions are charged at 1.8 per cent plus $0.15 per transactions.
MasterCard, Visa, and Discover keyed-in transactions are set at 2.3 percent plus $0.15 per transaction.
American Express keyed-in transactions are 3.5 per cent plus $0.15 per transaction.
In addition to this, Groupon will also offer a “lowest rate guarantee” which ensures that any merchant providing proof of lower third party rates will receive a reduction in Groupon rates.
For non-Groupon merchants, the rates still represent good value, with swiped transactions charged at a rate of 2.2 per cent, and 3 per cent for American Express.
Another incentive for merchants is the ability to get paid faster. Instead of the two or three day wait, users will now receive payments overnight and the service is backed up by a dedicated support team.
The killer question asked in the PC World article is, “Will Groupon merchants forever be able to use Groupon’s new payments system at the lower rate, or will the lower rate expire when their Groupon promotion expires?”
Groupon’s payment system looks good now, but will it prove cost-effective for merchants in the future? Let’s hope it isn’t a fad.