Groupon’s Mason Says New Payments Business Will Help Sell More Deals

The payment services sector may be getting more crowded, but Wall Street seems pleased that Groupon has jumped in.

On Wednesday, the daily deals giant rolled out Groupon Payments, which will allow merchants to accept credit cards using an iPhone for as little as 1.8 percent plus 15 cents per transaction, a rate Groupon guarantees is the cheapest available.

Immediate investor reaction was positive, pushing the company’s beleaguered stock up 14 percent this week to $5.38 a share, and it managed to hold on to most of that, closing Friday at $5.28.

Groupon hopes the payments feature and its low transaction costs will give merchants another good reason to use its deal services, even if Groupon Payments does not end up generating a lot of additional revenue on a standalone basis.

“We think this will help us sell more Groupons,” said Groupon’s CEO Andrew Mason, in an interview with CNBC. “We are not focused on these businesses boosting the bottom line; they don’t need to be wildly profitable on their own. What we are really focused on is using additional services to strengthen the value proposition that we have for our merchants.”

And that may be a good way to look at it, since many critics believe it is a race to zero as new competitors entering the payments business are forcing prices down.

Here’s Mason’s interview with CNBC:

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