Groupon Enters POS Industry With Launch Of Payments Platform

Square may have hoped to steal all this week’s headlines with their $200 million fundraising announcement, but thanks to an unlikely new competitor, that won’t be the case.

Groupon, the company best known for its daily deals program, has launched their new Groupon Payments mobile POS service, now available to the entire country after a successful trial run in San Francisco. spoke with Gene Alston, vice president of Groupon Payments, to discuss how Groupon’s launch will impact the POS industry.

The specifics of what Groupon Payments offers are simple yet impressive: they pledge to match the lowest cost option for any merchant to accept credit cards, and they’ll deliver overnight credit card deposits daily.

For companies that run Groupon deals, swiped transactions completed with MasterCard, Visa or Discover will face a fee of just 1.8 percent and $0.15. The rate goes up to 3 percent with American Express, but the $0.15 fee remains. Non-Groupon merchants see the MasterCard, Visa and Discover fee rise to 2.2 percent.

Alston said Groupon’s size and experience are what allows the company to offer such competitive rates.

“Groupon has a lot of scale in credit card processing. We process a lot of transactions form consumers buying Groupons, and we’re able to take our scalability and negotiate the best rates from our bank partners,” Alston said.

“Because we have a direct relationship and there’s no middleman, we can pass all those savings directly on to our merchants.”

The company will offer two different versions of its POS terminals – an audio jack reader made in partnership with ROAM, and a case based card reader available for $100 provided by Infinite Peripherals. Through this, Groupon hopes to appeal to both retailers with a heavy amount of card traffic and to those who demand the familiar iPhone-based terminals.

Among the other interesting features Groupon Payments offers is an analytics service allowing merchants to track the success of their Groupon campaigns. Asked if he viewed analytics as an increasingly competitive field (especially given Jack Dorsey’s recent Square ( speculation), Alston replied in the positive.

“The way we think about it, analytics is really a core part of what we do,” Alston said. “We find that merchants that do [use our analytics] are generally happier with their campaign … so we’re a big believer in providing more of that to merchants.”

To hear Alston’s full remarks, including his take on Groupon’s role as a POS provider in the future, listen to the podcast below.


Gene Alston
VP/GM Groupon

Gene is responsible for mobile payments at Groupon where he gets to fulfill his passion for creating new products for local businesses.

Prior to joining Groupon, he was at PayPal for seven years, most recently as head of corporate and business development. As part of the founding teams for PayPal merchant services and eBay’s X commerce developer platform, Gene help build PayPal into a service used on over 45 percent of websites today.

Previously, Gene held product and business development roles leading small business services at Concentric Networks, XO Communications, and Verizon. Gene holds a BS in biology from University of Washington and a JD/MBA from UCLA.

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