Credit Card News
Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » Groupon to PayPal and Square: Look Out

Groupon to PayPal and Square: Look Out

Add to Favorites:
Groupon to PayPal and Square: Look Out

Hot on the heels of PayPal`s March announcement of a mobile credit card reader, called PayPal Here, anonymous sources say that Groupon, the hugely popular daily deal website, is manufacturing its own credit card reader designed to be used exclusively by businesses that they work with.

A spokesman for Groupon, Paul Taaffe, declined to comment specifically on the report of a credit card reader in response to media inquires, but said that “Groupon has a number of trials in markets that are designed to help merchants and small businesses.”

The source says that the reader is manufactured by Infinite Peripherals, Inc. and will plug into the headphone jack of any smartphone, just the way card readers from Square and PayPal do. The device is reportedly being tested by small merchants throughout the San Francisco Bay area, the hotspot of mobile technology.

Who Can Use It?

Unlike Square and PayPal Here, which can be used by anyone, the rumor is that Groupon`s device will be for use specifically by merchants offering deals from Groupon. Since any business is able to offer a deal through Groupon, however, it`s unclear how that boundary might work. And in fact, since Groupon won`t comment on whether or not they are actually even manufacturing the device, anything said by any media outlet at this point is pure speculation.

What`s the Takeaway?

Any card reader takes a percentage of the sale – how much will Groupon take? The anonymous source says that Groupon is taking something less than three percent on each transaction, which is in line with PayPal`s 2.7 percent fee for any transaction. Square takes 2.75 percent per transaction if it`s made by swiping the card, or 3.5 percent plus 15 cents if the card number is keyed in. The transaction fee from the credit card issuer is built into this fee.

Consumer Response

Offering its own card reader would be one way for Groupon to up its profits, but that will depend on whether merchants go for its card reader – something that will depend on reliability, ease of use, and marketing. So far, people seem to be quite loyal to Square, which was the first of this type of mobile card reader to be introduced, back in 2010 by Jack Dorsey. PayPal`s Here device, though not yet available, has been the subject of some derision by online technology commentators.

Reaction to PayPal Here from the online technology magazine

  • “This strikes me as being a bit old-fashioned. There are far better mobile payment mechanisms appearing now.”
  • “This idea is clearly stolen from Square. I hope Square had a patent, sues and wins.”
  • “Ever since it went live in October 2010, Square has been the undisputed champion of the industry and the best its competitors could hope for was to keep up with its pace.”

Clearly, people in the tech field have strong feelings about this. With Square perceived to be the first and the best innovator in the field, Groupon has its work cut out for it proving itself, if they are indeed coming out with this technology.

A Geometric Question

If Groupon really is making their own credit card reading device, they may be simply deciding what shape to make it. With the Square card reader in the shape of (what else?) a square, and the PayPal Here reader in the shape of a triangle, Groupon may want to go with something entirely different – but what? A coupon is the shape of a rectangle – makes sense to me. Just a suggestion, Groupon!

Add to Favorites:

Related News:

Fifth Third Bancorp Upgrades App

By Dar Dowling, Posted: January 20, 2017

Fifth Third Bancorp has upped the ante when it comes to their mobile app, in terms of how many ways users can pay for merchandise – now letting them make payments with all of the available payment platforms. Continue reading
New Credit Card by Amazon and Chase

By Dar Dowling, Posted: January 19, 2017, Inc. and Chase have joined together to roll out the new Amazon Prime Rewards Visa Signature Card offering 5% back on all purchases. Continue reading
Wix and Square Team Up to Make Payments Easier

By Dar Dowling, Posted: January 18, 2017

Wix, a cloud-based web development platform letting people set up a wide range of websites, is teaming up with Square to provide merchants and entrepreneurs a new method of taking payments for products and services bought online and in ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
For Excellent, Good Credit
You could turn $200 into $400 with Cashback Match™. We’ll automatically match all the cash back you earn at the end of your first year. New cardmembers only.
For Excellent, Good Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit