Groupon to Roll Out iPad POS Service to Compete with Square

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I am a Groupon user. You might even say I am a reformed Groupon-a-holic. I spent many a-dollar on many a-deal when the website first launched. I can’t count the number of deals I let expire before using, simply because I forgot I had them. I’ve gotten better about it, but the deals are so good that it is hard to pass up. Today, the flash deal company announced that it is growing its business to offer point-of-sale services to retailers who run Groupon promotions. This new iPad program will make it easier for customers and businesses to seamlessly work with deals they have promoted through Groupon.

The new service provided by Groupon includes software that will allow businesses to track credit and debit transactions, an iPad, and a tool that will allow the company to redeem a patron’s Groupon voucher with just their name.

Additionally, customers that have the Groupon app downloaded and Bluetooth turned on inside a store will have their discount recognized automatically when they walk through the door.

The incentive for retailers to use Groupon’s new POS, called Gnome (G-Nome), is the low service fees. Just like Square, Gnome charges a very small fee for purchases. In fact, Gnome is less than Square’s 2.75 per-transaction fee with only 1.8 percent plus 15 cents per Mastercard and Visa transaction. It should be noted that Groupon will charge an additional $10 for the Gnome iPad system.

Groupon will begin rolling out the new Gnome POS system to new and existing businesses working with the promotion company. Any upcoming promotion will be expected to use the service. Groupon hopes to have all retailers on board as soon as possible.

“Gnome will become a standard part of the experience of running a Groupon for both merchants and consumers, and we’ll handle any exceptions on a case-by-case basis,” spokesman Nick Halliwell told Re/code in an email.

While the POS service is geared toward making the Groupon experience as seamless as possible, retailers won’t have to hand back their iPads when their promotions are over. Businesses will be able to continue using Gnome and the Groupon software as the in-house register. Groupon has a leg up on Square for entry into the market because they already have tens of thousands of customers that will be expected to transition to the POS service in order to participate in Groupon promotions. That gives the company a built-in customer base that Square had to work to generate.

On the other hand, Square has already made a name for itself over the past few years as the small business POS service provider. It will be interesting to see if another company can break off some of Square’s customer base.

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About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik