IP Commerce, Groupon Payment Partner, Shutting Down

IP Commerce's decision could leave two dozen or more customers seeking other tools needed for processing online and bricks-and-mortar transactions. It underscores the challenges of breaking into the low-margin payment-processing business, which is dominated by such existing providers as JPMorgan Chase & Co. (JPM), First Data Corp. and WorldPay Ltd. IP Commerce had also been used by mobile payment vendor Square. "As the commoditization of payment-processing services accelerates, we have determined that it is no longer economically viable for us to provide payment processing services," Charlie Wilson, an executive at IP Commerce, wrote in the e-mail to customers. In the commerce industry, there's little room behind the scenes for profit after credit-card companies and banks take their cuts of a transaction. Newer entrants in the field, such as EBay Inc.'s (EBAY) PayPal and Jack Dorsey's Square, have found success by offering their services directly to consumers. Story