On Monday, May 19, Groupon made a pretty sizable announcement. On Monday, the Chicago company launched a new point of sale platform, Gnome:

Gnome, a new tablet-based platform that will provide sophisticated tools to local merchants to run their businesses more effectively and understand their customers better. The tablet will let merchants instantly recognize their Groupon customers as they enter their business, seamlessly redeem Groupons and save time and money with a simple point of-sale system and credit card payment processing service.¹

The Gnome system runs on an iPad Mini. According to Re/code, “Groupon will charge $10 a month for the Gnome iPad system.”² The Gnome system includes payment processing to the tune of “1.8 percent plus 15 cents a transaction for MasterCard and Visa purchases.”³

This is an interesting move for Groupon, and essentially sets up an “us or them” scenario; one which may damn the company. According to TechCrunch, Groupon “will soon effectively require all merchants running promotions to use the Gnome platform, which is also a notable change for the company.”⁴

From what information is available, it looks like the Gnome will be Groupon’s final undoing. Groupon will, essentially, begin bullying its current customers into adopting Gnome. Further, in the descriptions of the product, it looks as if Gnome will be intrusive on the customer as well:

Gnome helps local merchants remember your preferences and makes it easier for them to give you the royal treatment you deserve.⁵

Groupon has wrapped up a massive data play with shiny bells and whistles – an iPad – and will soon intentionally pit itself against other payment processors. Bold, yes. But will it work? In my opinion, for whatever that’s worth, the Gnome payment processing system will be Groupon’s final undoing. Further, I imagine that no one will ever even see one in stores.