Groupon is the latest company to launch a card reader that merchants can connect to an an iPhone or iPod touch in order to accept credit or debit card payments. The move brings the daily deals firm into competition with Square, PayPal and a plethora of other companies that have launched such products.

In such a crowded market, Groupon hopes to differentiate itself by offering low fees to merchants for handling their credit and debit card transactions. In fact, it guarantees to be the lowest cost option for merchants to accept cards, says the company.  The service is called Groupon Payments.

Following a trial in the San Francisco Bay Area, the service is now available throughout the US. The service is an attempt by Groupon to maintain loyalty among merchants for its core service of selling discounts to consumers. Its typical customers are highstreet businesses such as restaurants, bars, gyms or hairdressers.

The new service is available on the latest Groupon app for merchants that is available for the iPhone and iPod touch. Merchants need the app in addition to the free card reader.  Also, merchants can have a phone case that will act in the same way as the card reader. The case fits onto the iPhone or iPod touch and is currently used in Apple stores. However Groupon charges merchants US$100 for the case.