Groupon Launches Payments Service And Acquires Online Reservation Startup Savored

by Trefis Team
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Market
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Trefis
GRPN
Groupon
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Groupon (NASDAQ:GRPN) has acquired Savored, a startup that provides online reservation service for high-end restaurants for an undisclosed sum. It helps fill empty tables by offering deep discounts on meals. The company has a client base of more than 1,000 restaurants that use its service, and this acquisition will allow Groupon to access the high-end restaurant market as these restaurants are usually hesitant to slash pricing and margins to do a Groupon deal. Apart from the reservation service, Savored also provides a yield management service to help restaurants increase customers at off-peak hours. [1]

Check out our complete analysis of Groupon

Groupon For High End Restaurants

To book a reservation with Savored, customers pay a reservation fee of $10, and then get up to 40% off of their bills. Restaurants use this service to manage yield during off-peak hours. Savored will continue to operate as part of Groupon.

Groupon Launches Online Payments Service

Groupon also launched GrouponPayments, a service it claims to be the lowest cost option for merchants and small businesses accepting credit cards. The payment service is integrated into the Groupon Merchants app for the iPhone and iPod Touch. The service charges 1.8% plus 15 cents per transaction for MasterCard, Visa and Discover. For American Express, the company charges 3% plus 15 cents per transaction.

Apart from being cheaper, the advantage of the payment service is that the merchants will receive credit-card deposits in their bank accounts overnight, compared to the usual 2-3 business days offered by most other credit card processing services. The service is targeted at businesses that run deals with Groupon, but it is also running a pilot test offering the service to non-Groupon merchants at 2.2% (or 3% for American Express) plus 15 cents per transaction. [2]

We currently have a ~$8 Trefis price estimate for Groupon, which stands nearly 70% above its current market price.

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Notes:
  1. Groupon Acquires Savored, www.forbes.com, Sept 24, 2012 []
  2. Groupon Launches Online Payment Service, www.forbes.com, Sept 19 []
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