Groupon to PayPal and Square: Look Out - Other News


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. receives compensation from most 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

Groupon to PayPal and Square: Look Out
The content is accurate at the time of publication and is subject to change.

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!

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Chase Freedom Categories for January Unveiled

Posted: December 17, 2018

With the Chase Freedom credit people earn 5% cash back in three bonus areas per quarter, and they have just announced the offerings for the next quarter. Cardholders will earn enhanced rewards when they pull up to the gas station, make ... Continue reading
Get 100,000 Bonus Points with the Radisson Rewards Premier Visa Signature

Posted: December 14, 2018

If you have been thinking about getting the Radisson Rewards Premier Visa Signature credit card, now might be the time to take another look because it now comes with 100,000 bonus points. This is a limited time offer, which is in play from ... Continue reading
Minor League Baseball and Allegiant Airlines Partner Up

Posted: December 13, 2018

Allegiant Airline and Minor League Baseball have inked a deal paving the way for a credit card partnership, one giving fans a credit card that reflects their fandom in terms of rewards whether they are traveling or catching a game. When ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!