Groupon Expands Square-Like Mobile Payments Service to Android

Groupon said this morning that its mobile payments service is now available to Android users, after launching first on the iPhone in September.

Groupon Payments on AndroidThe service allows merchants to accept credit cards and debit cards by swiping them through a card reader attached to a mobile device, like an iPhone or iPod touch or Android device.

While payments has become a very hot space over the past year, with many companies providing card readers for mobile devices, what Groupon hopes will stand out about its service is the price.

Participating Groupon merchants will be charged as little as 1.8 percent, plus 15 cents per transaction, compared to Square, which charges 2.75 percent per transaction, or a flat rate of $275 a month. As with the iPhone offering, Groupon is also guaranteeing Android users the lowest overall rates.

Aside from price, Groupon also benefits from having a sales team, which is already calling on thousands of small- to medium-sized merchants across the U.S.

The payments service is complementary to a point-of-sale solution Groupon is selling, called Breadcrumb, which is being aimed at cafes, bars and restaurants.

Groupon’s goal for both Breadcrumb and Groupon Payments is to cut costs for merchants who are used to paying high prices for low-tech, antiquated systems. In return, Groupon hopes to create a closer bond with merchants that will encourage them — or potentially require them — to run coupons in the future.

But it’s a long-term bet that could mean not generating a lot of additional revenue on a standalone basis. As CEO Andrew Mason has said before, he believes these services will sell more Groupons — but may not be wildly profitable.

This morning, Groupon’s stock was trading at $5.16 a share, down three cents. The stock has rebounded some since it was trading at its all-time low of $2.60 a share in November.


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