Groupon will provide almost all of its merchants with iPad-based cash registers

Coupon-providing middleman Groupon(s grpn) is going to provide a point-of-sale device to nearly all of its merchants. According to a press release posted on Monday, the checkout system, called Gnome, will be iPad-based and will cost $10 per month, and any business that offers a deal through Groupon will be expected to use it.

Gnome also will also include payment processing, which brings Groupon into direct competition with companies like Square and PayPal. Groupon’s payment processing will nick 1.8 percent of the price of goods sold through it, plus a 15-cent transaction fee for Visa(s v) and Mastercard(s ma) purchases.

Groupon already sold a point-of-sale product, called Breadcrumb, but it cost $100 monthly for a single iPad(s appl) rental in addition to payment processing fees. Bundling the software with Groupon’s deal product for cheap makes total sense: After all, Groupon’s bread and butter — online deal sales — has been in decline for several years, but the company still has active relationships with tens of thousands of local merchants. Now those merchants will have to get acquainted with Groupon’s software, or drop their Groupon promotions.

Groupon gains a huge install base for its POS product for both beta testing and mindshare purposes, and it’s hard to imagine a coffee shop signing up for Square if it already has a Groupon cash register.

Whether Gnome is enough to get new merchants to sign up for Groupon or whether it will cause existing merchants to flee remains to be seen. What is clear is that Groupon is no longer simply a “daily deal” merchant, but a technology company.