LevelUp Inc., a third-party mobile payment aggregator, is gaining traction. It disclosed in February 2013 that the number of customers using the LevelUp mobile application had doubled to 1 million users since November 2012. Additionally, 5,000 merchants have signed up to use the LevelUp service, the company said.
Developed by Scvngr, a Google Ventures-backed social location-based mobile gaming platform, Boston-based LevelUp debuted in March 2011 as a daily deals platform. Four months later it rebranded as a mobile payment platform. LevelUp founder Seth Priebatsch, who formed Scvngr back in 2008 at the age of 19, launched his latest venture with $20 million in capital funding.
"LevelUp is much more than a mobile payment app," stated Mark Fletcher, Director, Global Partnering & Application Development for Nokia. "Between the money it saves consumers, the analytics and the zero interchange fees it offers merchants; it has a great value proposition."
LevelUp has formed a number of strategic alliances. For one, when Boston-based ISO Merchant Warehouse unveiled its Genius platform in 2012, LevelUp was included in the platform. Dan Dufault, Executive Vice President of Marketing and Solution Innovation at Merchant Warehouse, said, "The LevelUp integration with the Genius Customer Engagement Platform is designed to work seamlessly for merchants, giving them the ability to tie LevelUp directly into their payment acceptance environment."
LevelUp is enjoying upward momentum, but will it have long-term viability? Ben Goretsky, Chief Executive Officer at USAePay, noted that incorporating LevelUp requires a number of steps, including educating merchants. "You have to convince your customers to download the app, start using it, pay through your phone or pay through the loyalty program," he said. "Let's look at it realistically. Authorize.Net, the largest gateway in the United States for merchant processing, at their peak had about 250,000 merchants."
Goretsky believes the number of people who continue to use the application within the retail environment will be more important than the number of app downloads as a key determinant of success.
Priebatsch, however, expressed optimism, stating that "an interesting fact is that once a user uses LevelUp more than twice, it's a 90 percent guarantee they'll keep using it at least once every month thereafter; often many more times a month."
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