Groupon, one of the world’s largest online daily deals provider has launched Groupon Payments-a service that lets U.S. restaurants, salons and spas, retailers and other businesses that run Groupon daily deals accept credit card payments at a lower rate than other popular services including PayPal and Square.

Built into the latest version of the Groupon Merchants app for the iPhone and iPod Touch, Groupon Payments facilitates credit card transactions for any Groupon merchant. The new payment solution was was piloted in the San Francisco with 150 businesses. The mobile payment app is built into the Groupon Merchants app on the iPhone and iPod Touch.

With Groupon Payments, local businesses pay 1.8% swipe fee plus $0.15 for each transaction for MasterCard, Visa and Discover purchases and 3% plus $0.15 for American Express purchases. Square charges 2.75%-per-swipe.

Groupon also plans to attract  merchants by processing payments faster than the competition-payments overnight, rather than the two- to-three days most credit card companies take. Plus, businesses get analytics on their transactions.

The new Groupon Merchants app, which lets merchants redeem Groupons and accept credit card payments from the same application, is available on Apple’s iTunes store. The app also lets you redeem Groupon vouchers, and you can get real-time business reports in the online Payments Center.

The feature does not appear to be supported yet on the Groupon Merchants App for Android.