LevelUp is a mobile payment platform that uses quick response (QR) technology to let customers make payments at participating businesses using their Android or iPhone mobile devices. Created by Cambridge-based social gaming company SCVNGR, LevelUp currently works with businesses in Atlanta, Boston, Chicago, New York City, Philadelphia, San Francisco and St. Louis.
SCVNGR originally launched LevelUp in March 2011 as a "deal of the day" platform. In July of that year, LevelUp abandoned that model to focus exclusively on mobile payments.
The majority of LevelUp users access the system using Android or iPhone mobile devices. The user downloads the LevelUp app and links a credit or debit card securely to the system. The app then displays a unique bar code, which participating merchants can scan to accept the credit or debit payment. Unlike many mobile payment solutions, LevelUp also offers access to customers who do not have compatible mobile devices. SCVNGR simply sends the user a physical LevelUP card marked with his or her unique QR bar code.
Discounts and Rewards
When a LevelUp user enters a participating business, he or she automatically receives a small amount of credit to spend at the establishment. The more the user spends at a given business, the more credit he or she receives. In essence, LevelUp functions as an automatic loyalty program, giving customers cash rewards at the establishments they frequent and redeeming those rewards instantly as payments are processed. The program takes its name from the "leveling" feature of its rewards system. When a customer initially visits a participating business, he or she receives a Level 1 deal; returning to the same place grants access to a Level 2 deal and then a Level 3 deal.
Instead of actually storing credit and debit card information, LevelUp has partnered with the payment gateway Braintree to provide secure storage. LevelUp puts an extra barrier between the consumer's card information and the merchant because the user's QR code stores only a triple token reference to his or her information, not the card number itself. There is no need for the user to carry physical credit and debit cards to shop at participating businesses. Furthermore, the mobile device or LevelUp card never leaves the consumer's hand, creating a process-level security measure. The LevelUp app includes several user-accessible security measures. Users can lock the app using a unique PIN on top of the PIN that they can use to lock the mobile device itself. LevelUp also allows users to instantly reset their bar codes online.
Initially, LevelUp charged participating businesses a 2 percent processing fee for every credit card transaction completed through the app. In July 2012, LevelUp eliminated that fee entirely through its Interchange Zero program, planning to recoup the cost by bringing in commissions from deals offered through the system.
Participating businesses can take advantage of several marketing tools through LevelUp, including customer acquisition campaigns and loyalty campaigns. The system includes a number of co-marketing campaigns such as employee rewards, new user rebates and promotional materials. LevelUp White-Label offers businesses a chance to build their own branded mobile payment applications using the LevelUp system or integrate its functionality into their existing mobile apps.