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By Ingrid Lunden

Groupon (NASDAQ:GRPN) CEO Andrew Mason last year set his company a goal of adding more value and diversity to its bread and butter business in daily deals, and today it took one more step in that direction: Groupon Payments — its dongle-based Square/PayPal Here competitor — has now been added to its Merchants app for Android handsets.

Groupon Payments first launched in September, but was available only for iOS devices. This new version, which was first soft-launched at the end of December, will give Groupon a much better crack at critical mass for the payments service. For now, the launch is U.S.-only, where Android devices now account for over 50% of all smartphones in use.

As with the iOS app (and in keeping with what competitors are doing), the primary purpose of Groupon Payments is to give merchants, especially smaller merchants, a cost-effective way to take card payments. But by rolling it into Groupon Merchants, the company is hoping for more sticky usage and traction by rolling it in with other features. This is not unlike what companies like Square are doing, with the concept of a merchant dashboard now almost table stakes in the mobile commerce game.

The Groupon version of that concept includes the ability to redeem Groupon deals, scan barcodes, view transaction history, add tips and taxes, make refunds, email receipts, and look at other purchasing and daily deals analytics to track things such as how well a particular deal performed. It also says it provides support seven days a week to those with any issues, and guarantees security on transactions.

What it has yet to do is extend Android to support Breadcrumb, the point of sale app that Groupon bought and offers on iPad devices to manage different aspects of running restaurants and cafes — including menus, ordering and labor management, and Groupon Payments.

The fees that Groupon charges Groupon Merchants for payments are 1.8% on Visa, MasterCard and Discover when swiped, 2.3% when keyed in, plus $0.15 for each transaction. American Express pricing is more complicated, as it is “determined by American Express based on your industry category.” The rates range from 2.3%-3.5% (swiped) and $0.00 to $0.15 per transaction, says Groupon. For non-Groupon Merchants, the fees are higher: 2.2% when MasterCard, Visa and Discover are swiped, plus $0.15 per transaction.

Like a lot of companies, Groupon has focused the majority of its first-try efforts on iOS users, extending them to Android in a second wave of growth. Groupon told me in December, when it was releasing a major update for its iPad app, that this is partly because Groupon develops first on the platforms that are used most by its audience. (Which is also why we’ve seen little, so far, from Groupon for Windows Phone and Windows 8.)

Tablets is one game where Apple (NASDAQ:AAPL) is still the dominant player, but when it comes to smartphones, Android is the biggest platform in the world. Gartner’s most recent figures for worldwide smartphone shipments from Q3 noted that Android accounted for 72% of all shipments worldwide. In the U.S. specifically, the figures are not as high, but still strong: ComScore’s most recent numbers, out in January, noted that Android was on 53.7% of all smartphones in use in the U.S., versus 35% for the iPhone.

Groupon has so far not released any figures on how Groupon Payments has fared on the iPhone, saying only that it has seen “great reception.” But it may be that the smaller, price-sensitive, independent local merchants that Groupon targets may be more likely to use Android handsets, which come at a range of prices and are often significantly less expensive than iPhones.

There are at least some that have been waiting for Groupon to add Android to its list of supported platforms. ”Heaven forbid if you have an Android phone though,” one person wrote sarcastically on Groupon’s blog post announcing the launch of Groupon Payments on iOS in September. “Nevermind that there are far more of them than iPhones….”

Groupon’s share price has been growing in the last couple of months with promises of improved revenues going forward, so it needs all the new services it can add to reach that goal. In the company’s last quarterly results, it reported results below expectations, with earnings per share of $0.00. Other strategies at the company have included adding restaurant reservations with its purchase of Savored, and a B2B service powering daily deals for other brands like Major League Baseball. Yesterday, it said that it would be releasing Q4 and full-year results on February 27.

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Source: Groupon Widens Its Mobile Payments Net, Adds Groupon Payments To Its Android App To Rival Square