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Groupon Launches Mobile Credit Card System

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In the past year or so, several companies have taken the opportunity to dive into the mobile payment processing business, and now one of the best known-daily deals service online is doing so as well.

Groupon Payments is a new service now being offered to businesses that are already partnered with the social couponing site that allows member merchants to process payments of all types at what is considered a significant discount, according to a report from the company. There was a pilot test of the program in San Francisco earlier this year that proved rather successful, and as such it is now being rolled out nationwide.

The service is already available to current member merchants through the company’s existing Groupon Merchants app, which is available for free in Apple’s App Store, the report said. However, it currently only works for iPhone and iPod Touch devices, and there is not yet an Android version.

Groupon is incentivizing use of the new service by offering lower interchange fees than either traditional payment processors or the new ones that are coming onto the market through mobile devices, the report said. For instance, all swiped purchases made with a Visa-, MasterCard- or Discover-branded debit or credit card carry an transaction fee of 1.8 percent of the total price, plus 15 cents. Swiped purchases on American Express cards carry a 3 percent fee plus 15 cents. Meanwhile, Visa, Discover and MasterCard entries that have to be keyed in have rates of 2.3 percent plus 15 cents, and those for AmEx are 3.25 percent also with the flat 15 cents.

However, for merchants to receive these low rates, they must have either run a Groupon daily deal in the past or be on record as offering one in the near future, the report said. The upshot of doing so, however, is that the service will likely reduce payment processing costs, and also give users a large amount of analytics related to the volume of card purchases they’re accepting.

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Mobile payment processing might be the next big thing in the industry, as many companies are now trying to get in on the ground floor of what could be a move away from traditional credit and debit card use.

Image: Groupon, via Flickr

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