GoDaddy's web management platform hosts 20 million small merchants, a base the company hopes will be attracted to use it — and not banks or fintechs — to handle online payments.
"Payments are central to what's happening now," said Greg Goldfarb, vice president of commerce products for GoDaddy. "We want GoDaddy to enable businesses to sell anywhere, whether that be online or in person."
GoDaddy has launched two payment acceptance devices — a countertop terminal and mobile card reader — aimed at businesses with an average of about $500,000 in annual transactions.
The launch is part of a broader strategy at GoDaddy to compete with firms that are embedding payments into other financial services. These firms are using stored credentials to offer a broader relationship with clients that also potentially makes banks and traditional processors less necessary.
"There's a long runway in this market. Most businesses start online now and many start with GoDaddy," said Richard Crone, a payments consultant. "Every business has to be integrated with an online offering. Even a restaurant or a grocery store or a bodega."
The Tempe, Arizona-based GoDaddy's hardware launch adds to a payment business the company has been building for most of the past year. In June it launched GoDaddy Payments, a processing platform, and in December 2020 it acquired the payments technology provider
Poynt is a rival to Square and other mobile point-of-sale payment hardware firms. It supports payment apps, invoicing and incentive marketing.
GoDaddy used technology acquired from Poynt to build its payment hardware. One, a "smart terminal," sells for $249 and is designed for brick-and-mortar businesses to accept payments and print receipts; it can be customized with the merchant's logo. A card reader with a docking station designed for mobile merchants and individual sellers at centralized locations such as farmer's markets sells for $49.
"For the first time GoDaddy has an end-to-end solution," Goldfarb said. "Deposits, payouts and managing transaction details and refunds are all contained."
The Poynt acquisition, processing platform and payment hardware will allow GoDaddy to compete in the growing market for
Many similar companies are adding 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 U.K. payment facilitator SumUp agreed to acquire U.S. payment technology company
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Banks and traditional payment processors have responded. Fiserv, for example, has made the
"We're looking at providing as much value as we can over time," Goldfarb said. "You imagine that this is the beginning of a new set of products."
GoDaddy's network of small businesses use the company's technology to manage internet domain registration and web hosting. The company was founded in 1997 and has built a services platform over the years that includes web design, digital and social marketing, as well as tools for entrepreneurs to manage the needs of their business.
The company has traditionally partnered with other firms to support payments. As early as 2014, GoDaddy partnered with
GoDaddy will continue to support its existing payment partnerships, but it is also looking to make it easier for merchants to work within GoDaddy's site, Goldfarb said.
GoDaddy is charging 2.3% of the purchase price for in-person payments and 2.3% plus 30 cents for e-commerce transactions.
"I think GoDaddy may have just declared a price war in the small-business merchant processing market," said Sarah Grotta, director of the debit and alternative products advisory service at Mercator. "I am sure their offering will attract smaller merchants who are price sensitive and are not tied into other, more sticky services such as payroll, invoicing and other critical business functions. The problem with price wars is that competitors can easily and quickly reduce their prices in response."