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Groupon Testing Merchant Payment System
An anonymous reader writes with news that Groupon is testing out a service for letting merchants accept credit cards that could put it into competition with PayPal and Square. "Groupon's nascent payment service comes with an Apple iPod Touch, and a case that wraps around the back of the device, which allows merchants to swipe credit cards." The fee structure isn't finalized, but their aim is to be competitive with PayPal and Square. "Groupon may have flexibility to charge lower fees because it could subsidize the payments service from money it makes providing other services to merchants, they said. PayPal's service, known as PayPal Here, charges a fee of 2.7 percent of the purchase price for all types of credit and debit cards - including those issued by American Express Co.. Transaction fees for processing AmEx cards are often higher. Square charges 2.75 percent per swipe. Groupon's test service is charging a 1.8 percent transaction fee and 15 cents per transaction, Rocky Agrawal, an industry analyst, reported in a VentureBeat blog late Thursday."
Wow, it's been minutes and no one has posted. I just wanted to say thanks for including some details in the summary, such as the percentages the different companies charge.
I would love for Paypal to have some competition. There asinine policies and terrible customer service have forever turned me of to the service.
On the Oregon Cost born and raised, On the beach is where I spent most of my days
Now all you have to do is install a Trojan and skimming will be completely automatic.
Time flies when you don't know what you're doing
Vultures! I bought an ex-display Qosmio laptop for £1100. This means their cut would have been £29.70?! That's massssiiiiive, I hope they die.
PayPal's service, known as PayPal Here, charges a fee of 2.7 percent of the purchase price for all types of credit and debit cards - including those issued by American Express Co.. Transaction fees for processing AmEx cards are often higher. Square charges 2.75 percent per swipe. Groupon's test service is charging a 1.8 percent transaction fee and 15 cents per transaction, Rocky Agrawal, an industry analyst, reported in a VentureBeat blog late Thursday."
OMIGOD Could it be that when barriers to entry into otherwise mono-duo-trio- opolisitc markets fall then competition drives down prices and consumers benefit?
I think the mere PRESENCE of such mono-duo-trio- opolisitic markets should AUTOMATICALLY invoke very tight regulatory structuring of those markets until such time as meaningful competition arrives.
Capitailsm can't survive it's own success if success always means the consolidation of markets. Something external has to step in and reset the game
It seems to me that people who love capitalism should all agree with me and the people who don't are just profiteers fundamentally unconcerned with the society they in or other people, at best paying some lip service to some "invisible hand" that justifies their selfish greed.
Sticking with the subject of attaching a credit card reader to an Apple device, there's a business in my city that uses an iPad with a credit card reader on it to do their transactions. Pretty slick considering point of sale (POS) systems used to run for $1.5k-$2k each.
But then on one busy day I saw the cashier constantly swapping the charger and credit card reader in and out because there's only one slot on an iPad. So clearly there's a drawback with that system.
Seems like the natural upgrade is to just have a tablet that can be on a charger AND support a credit/debit card reader at the same time. Bingo, cheap touch screen POS system. Is there one out there that already does this?
So any bill under $16.67 is MORE expensive via Groupon?
I make $16.67 works out at 45 cents for Groupon and Paypal and less than that Group costs more because of the extra 15 cents fixed charge per transaction.
e.g. $10, Paypal = 10*0.027 = 27 cents, Groupon = 17 cents + 15 cents = 33 cents
I reckon, a coffee here, a snack there, I think a lot more transactions are small than big, especially with Groupon, and so Groupon works out more expensive for these items, and so presumably they've worked out they can make MORE money from merchants that way.
Meanwhile this seems to be marketing it as 'cheaper' which it isn't.
Capitailsm can't survive it's own success if success always means the consolidation of markets. Something external has to step in and reset the game It seems to me that people who love capitalism should all agree with me and the people who don't are just profiteers fundamentally unconcerned with the society they in or other people, at best paying some lip service to some "invisible hand" that justifies their selfish greed.
The problem is that if you really have capitalism, then anyone can enter an industry if they see that the dominant one, two, or however many companies in it are pricing their goods or services too high. But we don't have that, we have corporatism, where those who are already in a market use relationships with the policy makers who oversee them for mutual advantage.
In other words, we already have something external that's supposed to do what you describe. The problem is that it usually stifles real competition rather than promoting it, because human nature is to act more from individual incentive rather than from altruism.
Space game using normal deck of cards: http://BattleCards.org
Since banks regularly charge even small customers less than this, I don't see the attraction. I have customers who turnover as little as $2m per year and with merchant rates down to 0.8% for Visa/MC. I don't understand why any merchant would be paying such high rates. Amex of course is much higher, but in Australia that's easily solved: very few retail merchants accept Amex.
The biggest improvement that happened in Australia was when retailers were allowed by law to charge a surcharge to the customer for processing credit cards. That has been very successful in keeping the merchant rate low since banks are not only competing with each other on credit card fees, but also with other forms of payment such as debit cards, EFT or cash.
Why would any consumer want a third party to get between themselves and the merchants they buy from? All the third party does is aggregate and sell purchase information.
Aggregating purchase data is the last frontier of data to gather and sell. No one has your complete purchase picture. Yet. The real fight is going on to be between you and merchants, and to get that data.
The public isn't noticing this "data grab" but it's starting.
Since this just uses the magnetic swipe available on the card what will happen after Chip and Pin is introduced in the US?
The readers for this are a lot bigger (since they need to have a keyboard) and have higher security requirements making them more expensive.
PayPal vs Groupon, who is more evil? I'd say it's a tossup.
I'll stick with Square.