According to the article, Groupon merchants felt they were paying too much for credit-card processing; therefore, this new offering is expected to significantly slash the complexity and cost of collecting credit cards. Overall, the new service is meant to benefit those companies by allowing them to process credit card transactions through smartphones.
With PayPal and Square being already sizable partners, this program seems to have tremendous potential for U.S. Merchants, but has Groupon thought through the security implications? For instance, the system involves a Groupon-branded card reader which is attached to an iPod or iPhone via an audio jack. Merchants can then accept credit and debit cards by swiping them through the card-reader, which is also compatible with iPhones and the iPod Touch. Putting my security hat on, this gets me thinking . . .
The rising tide of mobile devices and applications is creating vast opportunities for businesses to connect with customers, while simultaneously opening up an additional threat vector for cybercriminals. Does this new service pose increased security risk for online payment processing? If so, how can we better protect merchants on the web? The bottom line is that as cyber criminals seek new ways to attack social networks, mobile devices, and app stores, organizations must be agile to address and move past the problem quickly. By combining web session intelligence and behavioral analysis technology with online payment experiences and insights, organizations would be better equipped to rapidly identify and address the threats facing today's web-enabled platforms.
What do you think? Does Groupon have what it takes to play securely in the payment process market? I welcome your feedback in the comments.