It has been revealed this week by the Venture Beat website that Groupon, the deal-of-the-day website that features discounted gift certificates usable at local or national companies, is now testing and developing a payment gateway along the lines of Square, developed and created by Jack Dorsey, creator of Twitter.
Competitive Pricing Strategy
Groupon’s pricing for the new payment system is very competitive when compared to other already in the market space. With Groupon’s mobile payment system, it’s looking to charge a 1.8% transaction fee and a 15 cent per transaction charge, and 2.3% for AmEx transactions processed through their new terminal. This pricing strategy is designed to attract small and medium-sized businesses that are looking for cost-effective payment solutions. By offering lower transaction fees, Groupon aims to undercut competitors like Square and PayPal, making it an attractive option for merchants.
Testing and Development
It’s also been noted that Groupon is now handing out devices to be tested, together with free iPod touches to plug them into. This move indicates that Groupon is serious about entering the mobile payment market and is willing to invest in the necessary hardware to ensure a smooth user experience. The devices being tested are likely to include features such as NFC (Near Field Communication) for contactless payments, as well as EMV (Europay, MasterCard, and Visa) chip compatibility to meet global payment standards.
However, none of the information has been officially confirmed or denied by Groupon as yet. This lack of official confirmation leaves room for speculation, but it also suggests that Groupon is in the early stages of development and may be refining its technology before a full-scale launch. As more information becomes available, we will keep you updated.
The introduction of a payment gateway by Groupon could have significant implications for the market. For instance, it could lead to increased competition, driving down transaction fees across the board. Additionally, Groupon’s existing customer base could provide a ready market for its new payment services, giving it an edge over newer entrants.
Moreover, the integration of Groupon’s payment system with its existing deals platform could offer a seamless experience for both merchants and consumers. For example, a customer could purchase a deal on Groupon and then use the same platform to make a payment at the merchant’s location, simplifying the transaction process.
In conclusion, Groupon’s foray into the payment gateway market is a strategic move that could disrupt the current landscape. By offering competitive pricing and leveraging its existing customer base, Groupon has the potential to become a significant player in the mobile payment space. As the company continues to test and develop its technology, it will be interesting to see how it evolves and what impact it will have on the market.
Source: Venture Beat : Engadget
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