“Groupon’s pricing here is its main differentiator, if there is any at all,” Todd Ablowitz, president of Double Diamond Group LLC, tells PaymentsSource. He notes that similar services enabling merchants to accept payments through mobile phones are “rapidly becoming commodities.”

The cost for Groupon customers to accept payments through its service is 1.8% of the purchase plus 15 cents per transaction, reports indicate (Groupon did not immediately return an emailed inquiry from PaymentsSource).

For transactions over $16, Groupon’s reported pricing beats Square’s rate of 2.75% and no fixed fee, Ablowitz says. The lower price, plus other services Groupon may package in, could be alluring, he says.

“Merchants might begin to use more than one of these providers to get the better deal and try to arbitrage the rates,” Ablowitz says.

Payments Source, May 29, 2012
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