Groupon Eyes Small Business Expansion

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Groupon ( GRPN) has acquired FeeFighters, a company which helps small businesses compare payment providers.

FeeFighters is essentially a comparison engine which enables small businesses to find the cheapest merchant account provider or credit card processor and offers other services like its own Samurai payment gateway.

Groupon leads the daily deals space where it competes with LivingSocial backed by Amazon ( AMZN), Google ( GOOG) Offers, Yelp ( YELP) and countless clones, but is looking to expand its offerings in other categories to diversify its revenue streams.

Check out our complete analysis of Groupon here.

This represents another acquisition by Groupon to augment its core daily deals product with additional services so that it sign up more businesses to continue its growth momentum.

By launching auxiliary services like Groupon Scheduler, its new appointment handling service, and now helping merchants choose the cheapest payment gateway or merchant account provider, Groupon apparently is looking at generating additional revenue through these new services, or offering them as free services before making a pitch with their daily deals offering.

Groupon could also be looking at the lucrative payment processing space, which is currently dominated by Paypal owned by eBay ( EBAY), Google ( GOOG) Checkout, small merchant account providers and startups like Stripe. It could be looking to become the default payment gateway for small businesses as it already has a laundry list of potential customers which it could target with its new offering.

We currently have a $14 Trefis price estimate for Groupon , which is nearly 20% below its current market price.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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