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Groupon CEO Andrew Mason. Photo: Max Whittaker/TechCrunch/Flickr

Groupon shares were up 12 percent midday today immediately after the everyday deals company announced a new business line that’s only tangentially related to every day deals: Groupon is obtaining into the payments business.

Groupon is now providing low-cost credit card processing for any merchant who has ever run a discount promotion with the firm. There&#8217s a all-natural affinity between providing daily deals and operating credit cards, Groupon payments VP Gene Alston says. Groupon’s substantial sales force can sell each items to their merchant clients, for instance, and merchants will be able to monitor the extended-term spending habits of individuals who redeem Groupons and run other such analytics. The payments runner even lives inside the normal Groupon app.

But Groupon is also touting the strengths of its new payments technique entirely independent of the every day bargains offerings. It is touting what it claims are “the lowest rates in today’s marketplace,” 1.8 percent plus 15 cents per transaction on MasterCard and Visa. Alston also made it clear the firm expects Groupon Payments to be a lucrative operation.

“We undoubtedly appear at this as a business,” Alston says, “that’s a complementary business to what we already do today…. We can save the merchant money and also make a tiny money with no all the [traditional] middlemen involved.”

The huge startup in merchant payments correct now is Square. Alston says Groupon is going after “high-value enterprise merchants and greater merchants” who currently have credit cards, not the 1st-time card takers who use Square. Of program, like any potentially disruptive technology Square is trying to climb up the worth chain, and that puts it into competitors with Groupon Square lately announced it would approach payments for Starbucks, just the sort of enterprise merchant Groupon says it is targeting. On larger transactions, Groupon&#8217s rate will beat Square&#8217s flat 2.75 percent, and Groupon also touts its seven-day-per-week client service (the firm not too long ago started hiring in India).

Whether Groupon can compete with Square, PayPal and other individuals remains to be noticed. For now, Wall Street is pleased Groupon has located a way to both distinguish itself from a huge scrum of daily deal competitors and to diversify itself into a potentially lucrative new business line. For a business worth much less than a single third of what it was valued at just six months ago, that is no small accomplishment.

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