Groupon move into POS terminals

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The acquiring business, already fraught with rivalry, became even more competitive with an announcement from daily-deals giant Groupon that it will supply traditional POS terminals to merchants as part of a new initiative under its payments division.

The Chicago-based company, which last year jumped into the mobile-acceptance business with an app for mobile phones and tablets, says that starting now it is offering the Vx520 terminal from San Jose, Calif.-based VeriFone Systems Inc. to merchants that don’t want to use a dongle or a tablet. It is buying the devices in bulk and reselling them for $150 apiece. The company will also reprogram existing VeriFone and Ingenico point-of-sale devices to work with Groupon’s software.

The company, which has been testing the new hardware program with “beta” merchants, is also offering its existing point-of-sale pricing, 1.8% plus 15 cents for Visa, MasterCard, and Discover. As a promotional offer, processing for the first $5,000 in credit card transactions is free. And Groupon is carrying over from its mobile service such features as online applications and online transaction reporting.

While the new program places Groupon squarely in what is a traditional bread-and-butter business of independent sales organizations, Sean Harper, Groupon’s director of product, says the company is responding to merchant demand. Some stores the company talks to want many of Groupon’s payments features, such as the pricing and online applications, but don’t want to deal with replacing cash registers with tablets and card readers.

“A common thing for a merchant to say is, ‘A lot of that stuff is a no-brainer but moving my whole business over to an iPad for a POS, I’m not sure I’m ready for that,’” says Harper.

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