As you may have heard, daily deals giant Groupon is diving into the red hot mobile payments space, effectively launching a new product suite to help merchants process credit card payments and redeem digital coupons using their smartphones or tablets.

Groupon Payments, as the service is called, will thus rival Jack Dorsey’s Square, which just raised a gazillion dollars, and other formidable competitors like PayPal (Here), VeriFone and Intuit.

For now, Groupon Payments is only available in the United States.

Our Solutions Groupon Payments Groupon Works 150215 520x209 Meet the French company that is helping Groupon take on Square and others in the mobile payments space

Little did we know about the underlying technology powering the new Groupon service until Les Echos reported this morning (in French) that Paris, France-based payment solutions firm Ingenico is partly behind it.

According to Les Echos’ Maxime Amiot, who cites unnamed sources, Ingenico is powering Groupon Payments by delivering both the hardware dongle that can be plugged into mobile devices, and the software for iOS that is used to encrypt credit card transactions. Les Echos further reports that the commercial agreement between Ingenico and Groupon is commission-based.

Ingenico isn’t exactly a scrappy startup. The company says it employs 3,600 employees and has more than 17 million of its payment terminals deployed in more than 125 countries. In 2011, Ingenico sales exceeded 1 billion euros (nearly $1.3 billion today).

The same year, it spent about 8% of its revenue on R&D, the company says.

Ingenico recently announced that it would double down on mobile payment products to “respond to increasing demand for m-commerce solutions” in a presentation to investors.

The company owns a mobile commerce platform and services subsidiary called ROAM Data, which earlier this year introduced (but not launched) ‘NFC Swipe’, an device-agnostic reader with support for both near-field communication and magnetic stripe cards.

It has already partnered with juggernauts like PayPal, Apple and Google.

We’ve reached out to Ingenico and will update this post if and when we learn more about its solutions and the Groupon deal.

Image credit: Joe Raedle / Getty Images