CHICAGO, IL - JUNE 10: The Groupon logo is displayed in the lobby of the company's international headquarters on June 10, 2011 in Chicago, Illinois. Groupon, a local e-commerce marketplace that connects merchants and consumers by offering goods and services at a discount, announced June 2 that it had filed with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock. The company, launched in Chicago in November 2008 now markets products and services in 43 countries around the world. (Photo by Scott Olson/Getty Images)
Apparently the big Hail Mary lob for Groupon is launching a new payment service that “allows businesses to run credit cards using an iPhone or iPod Touch.” At least, that is what Reuters is reporting, that the company is entering the fray of well-tread territory already pioneered by PayPal, Square, etc., etc. Groupon will be charging 1.8 percent for MasterCard, Visa and Discover cards on top of a 15 cent fee per swipe.
The announcement for this new effort, which launches Wednesday, caused the stock to rise to $5.05.
It just seems a little funny that the company’s next big effort to ride out its storm is me-too’ing its way into “new” territory when Groupon was the one that had been imitated so often before with countless Groupon clones. Does this mean that the company is admitting a standalone daily deals business isn’t profitable?
The site has had its share of critics lately – Investor Place earlier this week described its crumbling stock as “continuing its death march…. [because] Groupon’s merchants are none too thrilled with the service.” Which, sort of, is the understatement of the year. But IP is citing a report from analyst Raymond James, which, in turn was, again, cited in Reuters, that found “a third were either ‘unsatisfied’ or ‘very unsatisfied,’ while 39 percent of Groupon merchants are not likely to run another Groupon deal over the next couple of years.”
All right. So. Lots of people didn’t do their homework and had their businesses fall apart because of wildly successful Groupons. That isn’t Groupon’s fault. But I’m not sure that offering fewer people a more convenient way to pay for their Groupons -- and giving the credit-card companies a cut -- is necessarily the way to go.
But, hey, you gotta give Groupon credit for trying “new” things. They might just stumble on the winning approach yet.
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.