Groupon enters mobile payment battlefield

Groupon is testing a payments service that lets merchants accept credit cards at what could be a knock-down price. The Groupon payment platform will charge a 1.8% transaction fee along with a 15-cent transaction charge. At that rate, the fee is less than Square's 2.75% or the 2.7% charged by eBay Inc's PayPal Here and Verifone SAIL, another player in the market. However, Groupon's competitors don't have a transaction fee.

Groupon's payment service comes with a free Apple iPod Touch, and a case that wraps around the back of the device, which allows merchants to swipe credit cards. That's more than Groupon's competitors, who are just handing out readers.