GoDaddy’s web-based management platform is home to 20 million small merchants, a base the company hopes will be attracted to using it – and not banks or fintechs – to manage online payments.
“Payments are at the heart of what’s going on right now,” said Greg Goldfarb, vice president of commercial products for GoDaddy. “We want GoDaddy to allow businesses to sell anywhere, whether it’s online or in person.”
GoDaddy has launched two payment acceptance devices – a countertop terminal and a mobile card reader – aimed at businesses with an average of about $ 500,000 in annual transactions.
The launch is part of GoDaddy’s larger strategy to compete with companies that integrate payments into other financial services. These companies use stored credentials to offer a broader relationship with customers, which also potentially makes traditional banks and processors less needed.
“The trail is long in this market. Most businesses are starting online now and many are starting with GoDaddy,” said Richard Crone, payments consultant. “Every business needs to be part of an online offering. Even a restaurant or a grocery store or a bodega.”
The hardware launch of Tempe, Ariz.-Based GoDaddy adds to a payments business the company has been developing for most of the past year. In June, it launched GoDaddy Payments, a processing platform, and in December 2020, it acquired a payment technology provider. Point. GoDaddy Payments integrates with GoDaddy’s website and marketing tools, as well as WooCommerce WordPress sites managed by GoDaddy. This allows businesses to manage orders, payments and refunds as well as other business functions on a dashboard.
Poynt is a rival to Square and other point-of-sale mobile payment hardware companies. It supports payment applications, invoicing, and incentive marketing.
GoDaddy used technology acquired from Poynt to create their payment hardware. One, a “smart terminal,” sells for $ 249 and is designed for physical businesses to accept payments and print receipts; it can be personalized with the merchant’s logo. A card reader with a docking station designed for mobile traders and individual vendors in centralized locations such as farmers’ markets sells for $ 49.
“For the first time, GoDaddy offers an end-to-end solution,” Goldfarb said. “Deposits, payments and handling transaction details and refunds are all contained.”
The acquisition of Poynt, the processing platform and the payment hardware will allow GoDaddy to compete in the growing market of payment facilitators, or businesses that support multiple types of payment for merchants, as well as accessing a marketplace to attract more consumers.
Many similar companies add financial services beyond payments. Square’s industrial banking license allows it to provide merchant credit without a partner bank, and Stripe and PayPal have also diversified their products. And last week, UK payments facilitator SumUp agreed to acquire US payments technology company Five stars build a larger network of merchants in the United States
“Investors I love the payment facilitator model, “Crone said.” This is something that has never been in the world of terminal sales. “
Banks and traditional payment processors have responded. Fiserv, for example, did the Clover a point-of-sale system, it acquired from First Data a key piece of its sales pitch to banks. And US Bancorp Last week, it announced it would integrate technology into its payments platform that would allow business customers to manage payroll, inventory, and accounts receivable in one digital location.
“We are looking to deliver as much value as possible over time,” Goldfarb said. “You imagine this is the start of a new set of products.”
GoDaddy’s Small Business Network uses company technology to manage Internet domain registration and web hosting. The company was founded in 1997 and over the years has built a service platform that includes website design, digital and social marketing, as well as tools for entrepreneurs to manage their business needs.
The company has traditionally partnered with other companies to handle payments. As early as 2014, GoDaddy partnered with Bandaged to speed up approvals for small businesses by adding payment card acceptance to online stores. GoDaddy then added Get Paid, an online mobile payment service in collaboration with Stripe, PayPal and the Dwolla digital payment rail. Businesses can support peer-to-peer payments, digital checks through the automated clearinghouse, and in-person card payments through PayPal’s mobile card reader.
GoDaddy will continue to support its existing payment partnerships, but the company is also looking to make it easier for merchants to work on the GoDaddy site, Goldfarb said.
GoDaddy charges 2.3% of the purchase price for in-person payments and 2.3% plus 30 cents for e-commerce transactions. Square, on the other hand, charges 2.6% plus 10 cents for contactless payments, swiped or inserted cards, and swiped magnetic stripe cards. Stripe charges 2.9% plus 30 cents, and Zettle from PayPal 2.29% fee plus 9 cents.
“I think GoDaddy may have just declared a price war in the small business transformation market,” said Sarah Grotta, director of debit and alternative product consulting at Mercator. “I’m sure their offering will attract smaller, price-sensitive merchants not tied to other stickier services like payroll, invoicing and other critical business functions. The problem with price wars is that competitors can easily and quickly reduce their prices. in response.”