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Should Mobile POS Be About Low Transactions Fees?

Written by Tom Ryan

With Groupon's introduction last week of a free iPad-based payment system, a pricing war appears to be breaking out among developers of mobile-based POS solutions.

Groupon's Breadcrumb POS comes with a low-price guarantee to "beat any comparable plan on credit card transaction fees." Credit card payments are processed for a fee of 1.8 percent per transaction, plus 15 cents. A launch promotion offers free processing on the first $5,000 in credit card transactions. Small business owners do not have to offer daily deals through Groupon to use the system but rates are slightly higher for non-Groupon users.

Although each plan is bundled differently, the rates appear competitive to other mobile POS providers:

  • Square: Charges 2.75 percent per transaction or a flat fee of $275 a month;
  • PayPal Here: Charges 2.7 percent per swiped transaction;
  • Intuit GoPayment: Charges $12.95 monthly and 1.75 percent per swipe. Merchants can also skip the monthly rate but the swipe fee increases to 2.75 percent.
  • PayAnywhere: Charges 2.69 percent per swipe.

Like many others, Breadcrumb POS includes several other benefits. Merchants can log cash transactions, print or e-mail receipts, calculate multiple tax rates, manage menu items, view transaction history and issue refunds. Receipt of the deposits are received within 24 hours, which Groupon claims is much faster than the typical experience of waiting two to three business days.

Breadcrumb POS also promises in-depth, real-time reports on product mix, daily and monthly sales, past customer purchases and deposit records. It also assures free and easy set up and comes with 24/7 phone technical assistance.

"With this launch we can help every local business replace their outdated cash registers with a modern, affordable, money-saving tool that allows them to save on credit card transaction fees and run their businesses better," said Mihir Shah, VP Merchant OS, Groupon in a statement.

Groupon entered mobile commerce in 2012 with the purchase of Breadcrumb, which had been primarily used by bars and restaurants. Its mobile-POS payments suite also includes Breadcrumb Pro, which caters exclusively to restaurants and bars and adds check and table management, time clock and other features, starting at $99 a month.

Other decision factors involved around mobile POS include the costs of the scanning device, the required length of contracts, and the ability to smoothly handle paper receipts.

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