Groupon grabs app maker Breadcrumb to rival Square, PayPal

May 30, 2012

Groupon is getting into the point-of-sale app business, and to do so, it has acquired the point-of-sale app maker, Breadcrumb.

According to a story from Fierce Mobile Content, it’s part of Groupon’s plan to join the market currently dominated by point-of-sale facilitator Square. In addition to its iOS apps, Square makes and sells a small credit card reader that plugs into the headphone jacks of mobile devices, allowing them to become mini cash registers. Already, Square is doing boatloads of business, processing $15 billion in transactions a year, the company reported in April.

So it makes sense that other companies want to follow the trial that Square is basically blazing in the mobile sphere. PayPal already has a rival service called PayPal Here, complete with its own credit card scanner. Also, Groupon is developing an on-site payment service, according to reports. Rumor has it, the daily deal company has been testing the system in San Francisco.

Breadcrumb, the company Groupon just acquired, specializes in point-of-sale transactions in the hospitality sector. As Fierce explains, the app turns each iOS device on a given network into a terminal that allows employees of a business to take payments, input orders, close tabs and send tickets to other terminals. It also can integrate with cash drawers and syncs data in real time through the cloud to keep all the terminals in a given business up to date. The whole service costs $99 per month, but the Breadcrumb app is free. The financial details of the sale to Groupon weren’t disclosed.

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It seems those rumors of Groupon looking to get into Square’s territory were accurate, though, and it makes a lot of sense. About 30 percent of transactions through Groupon, which sells group coupons to local businesses, are completed through mobile devices. Groupon also works to build partnerships with merchants, so it seems likely that the company will leverage the foundation of its existing coupon services to go with the point-of-sale service to provide users with things like loyalty discounts that merchants might not be able to provide through Square or PayPal.

Reports say that Groupon’s prices for facilitating transactions are also a little different from the competition. Supposedly, Groupon is charging a transaction fee of 1.8 percent of the total amount of a transaction, plus a 15-cent fee for each transaction made. That may actually give it a leg-up on Square, which charges a flat rate of 2.75 percent on each payment, but doesn’t have a per-transaction fee. Overall, merchants whose transactions are higher stand to save with Groupon, but we’ll have to wait and see what other details emerge about its rumored service, and whether it’ll be able to stand against the already-established Square and burgeoning PayPal.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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