Groupon Launches Breadcrumb To Expand Its Reach In Hospitality Industry

by Trefis Team
-0.11%
Downside
6.29
Market
6.28
Trefis
GRPN
Groupon
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Groupon (NASDAQ:GRPN) launched an iPad based point-of-sale (POS) service for retail establishments and restaurants last week. The service is named Breadcrumb after the POS company it acquired early this year. The service costs $99 per month to authorize one iPad, $199 for two, $299 for five and $399 for up to 10. The company had a successful New York City pilot where it tested the service in many restaurants, cafes and bars and is now launching the service countrywide. Retailers can also sign up for the “Breadbox” which contains an iPad, iPad stand, cash drawer, credit card swipe, printer, router, wireless access point and cables. This is a key pivot in Groupon’s business as the daily deals giant seeks to diversify away from the deals business. [1]

Check out our complete analysis of Groupon

Groupon To Become The OS For Local Commerce

Breadcrumb is fully integrated with GrouponPayments, an online payment service, that the company claims to be the lowest cost option for merchants and small businesses accepting credit cards. The payment service is also 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 mainly targeted at businesses that run deals with Groupon; but the company 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 Serves up Breadcrumb, www.groupon.com, Oct 10, 2012 []
  2. Groupon Launches Online Payment Service, www.forbes.com, Sept 19 []
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