Is Groupon and Its New Services a Safe Investment for Small Businesses?
More and more "daily deals" companies are aggressively taking action to give vendors the tools they need to sell directly. Groupon has been in the process this year of releasing a number of payment processing tools in hopes of turning around its falling stock shares, expanding its base service of finding great deals near and in big cities in the US. While many businesses have found success with rebranding in an attempt to boost sales, not everyone is sure Groupon will survive.
Two most recent Groupon releases, Payments and Breadcrumb, may give certain small businesses some helpful and cost-efficient tools for processing payments and keeping track of data, according to some hopefuls. Others predict that Groupon's new attempt to branch out could stabilize its stock shares. However, not everyone is so sure of Groupon's new offerings and a long-term improvement of shares, predicting that Groupon's stocks will remain at an all-time low.
A Look at Groupon Payments
On September 19th, Groupon released a new tool for vendors that claims to make credit card transactions easier than ever to process at some of the lowest rates, a direct attempt to compete with Square, a leading company in the payment processing industry, and Paypal. This new tool, Groupon Payments, allows businesses to take credit card payments using their iPhone or iPad.
Groupon's fee structure for Payments is certainly competitive: Visa, Discover, and MasterCard are 1.8% + $.15 per transaction while American Express is 3% + $.15. PayPal charges 2.7%, as a comparison. Groupon announced they will allow vendors who don't use their services to accept payments, but their fee structure will be slightly higher: 2.2% + $.15. Of note, though, is that these fees are still competitively lower than many leading payment providers.
However, some have been a bit skeptic as to whether or not businesses would actually use this service and if it would save Groupon's erratic stocks. After all, the lowest payment rates are only for Groupon Merchants. Others have wondered if Groupon would actually honor the low fees or if it would eventually raise the cost once the promotion expires.Continued on the next page